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Matt Peachey

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Matt Peachey - Pindrop

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It’s time to up defences against fraud

03 May 2016  |  721 views  |  0

Earlier this year, the Financial Fraud Action UK (FFA UK) released its latest findings detailing the extent of fraud in the UK. It found that five million frauds occur every year across England and Wales, costing the UK around £24bn. It highlighted that the extent of phone fraud has increased by 92% in just 12 months. These figures are high and yet what is frightening is that this is only part of the picture.

Fraud on the phone channel has typically been underestimated or neglected. It has lacked the same innovation, education and sophistication addressing online fraud and as such fraudsters are taking full advantage of this as they use cross channel tactics to commit these crimes.

Most businesses have been focusing on improving their cyber defences as attacks online grow more sophisticated. These breaches are continually hitting the headlines causing organisations to rethink their defence strategy against fraud.  But in doing so, businesses need to recognise its most vulnerable channel – the phone. Without the right authentication and fraud detection in place, organisations will continue to get duped, particularly as the boundaries between the phone and online continue to blur creating multiple areas of vulnerability and exposure.

The lack of attention the phone channel has received to date, means that phone fraud is a growing problem for financial institutions due to its ease, low risk and low cost in exploiting this channel. It comes in many forms with attacks in the call centre costing organisations in terms of losses, time and expense and incident response.

For a fraudster, these paths present several advantages. Fraudsters are typically professional social engineers and experts at manipulating people. When speaking to a call centre representative, whose objective is to rightfully prioritise being helpful, a fraudster knows that identifying and handling suspicious calls is not a core competency for that representative.

Currently, the only clear defence against these fraudsters is the asking of a few personal questions (known as knowledge-based authentication or KBA). If a fraudster can provide that information, the ability to move funds is practically unrestricted. These details are becoming increasingly easy to access via the dark web or through social media and leaves organisations exposed to two things – the risk of transferring funds to a fraudster in an attempt to deliver on a great customer experience or alternatively, treating a genuine customer like a fraudster and impacting on their customer experience. It’s Catch 22.

For this reason, organisations are looking towards technology to help navigate this storm. Technology such as voice biometrics give agents the ability to verify customers but it isn’t enough to arm them to detect fraud, particularly with new callers that have yet to register their voice. Multiple layers of security and authentication is needed to enable organisations to identify attackers in all parts of the phone infrastructure - from live calls to recorded calls, automated answering systems and outbound calling systems. Agents can build verification scores using key indicators to identify that a caller is who they say they are. Agents will be provided with the confidence needed to move forward with the call in a timely manner.

This is why phoneprinting™ technology is fast becoming a new way to detect fraud and authenticate customers. It identifies specific components about each call such as the location a call is coming from, the device, whether it’s a mobile or landline or whether the phone has been used to call the company before. Combined this can aid in detecting fraudulent activity before it becomes an issue.

This quick and confident action is what is needed to stamp out phone fraud, fraud that is resulting in real financial losses for organisations as well as losses in call centre time, expense and incident response. It is also impacting on customer trust. The right authentication and fraud detection must be in place to circumvent attempts by fraudsters to dupe businesses across all their channels. It’s time to act smart about fraud and make sure all bases are covered to finally remain steps ahead.  

 

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