Javelin was retained by SAS to understand the current state of e‐channel fraud among U.S. financial
institutions (FIs). Javelin Strategy conducted in‐depth interviews with risk and fraud executives from
small, mid‐size and large financial institutions to meet the research objectives. In this whitepaper,
Javelin also presents relevant elements from its proprietary consumer data to bring in additional
insights from the consumer perspective. For more info: www.nafcu.org/sas
17. V. Fraud Prevention Strategies
All the executives interviewed are completely aware of the need to shake up and improve their
current fraud prevention strategies in the electronic banking world. Key areas for future anti‐fraud
spending and innovative fraud tracking include:
Analyze fraud across channels using an integrated approach. One of the major
problems with electronic fraud is the inefficiency of tracking crimes in silos. Tracking
fraud across channels in an enterprise view is essential for FIs to get a clear picture of
current fraud loss. FIs will need to heavily invest in this area to build a platform to
integrate departments, products and channels in order to effectively monitor, mitigate
and prevent fraud.
ID and device recognition is essential to increase adoption of mobile banking.
Javelin’s data shows that 18% of consumers who have mobile banked in the last 12
months are looking for their banks to incorporate mobile device authentication and
21% stated they expect their banks to include additional authentication besides
username and password (see Figure 6, on page 15). Consumers are willing to take
more control in their banking relationships. Indeed, mobile devices are becoming tools
to fight fraud as their use for one‐time‐password and out‐of‐band transaction
verification increases. With more robust device security and ID recognition tools, FI
executives should work to empower customers to work as partners in helping to
mitigate fraud occurring across any channel.
Performance metrics are necessary to direct resources to areas of greatest need. It’s
not enough to fight against fraud; it’s also essential to measure performance. Most FIs
use basis points—net losses compared to net sales volume—to track their return on
investment (ROI). Executives mentioned tracking all fraud tools in terms of the
numbers of accurate cases detected and total fraud losses compared to the
investment. The revised FFIEC guidelines make it clear that not only are FIs expected to
adopt advanced user identification and authentication techniques, technologies and
processes, they will need to demonstrate and document their success for the regulator
as well as for internal management reporting. This means being able to measure
attempted attacks as well those successfully thwarted, while performing analysis that
will enable redirecting resources where needed for constant improvement.
Real time fraud processing and tracking of transactional data is increasingly
important in this era of constantly changing technology and progressively
sophisticated malware attacks.
Current State of E‐channel Fraud Trends: Online Banking, Mobile Banking and Card Fraud – September 2012 17
20.
Learn how SAS can help financial institutions monitor behavior across multiple e‐banking channels
at www.sas.com/security
Current State of E‐channel Fraud Trends: Online Banking, Mobile Banking and Card Fraud – September 2012 20
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