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An article relating to this blog post on Finextra:

Crooks net $13m in ATM heist

Crooks broke into the computer network of FIS earlier this year, upped the limits on pre-paid cards, cloned them and then withdrew $13 million from ATMs around the world, according to security blogger...


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Catch the crooks or stop the fraud?

Every time that a fraud hits the headlines there is naturally a huge focus on how the crooks got hold of all those personal banking details – this Finextra story is a good example. But there is often less attention given to how they were then able to use the customer details to extract money from customers bank accounts.

Take card cloning. Of course it’s a massive problem, but if the fraudsters couldn’t take advantage of the cloned cards, the resulting loss to banks – and significant impact to customers – would be vastly reduced.

The problem for banks is that increasingly the personal details of their customers can be “stolen” from any number of sources, for example in the recent Sony data breach. Banks tend to only come into the picture when the crooks try to use that information for their own gain, but the impact of their fraud harms public trust in banks and creates a general climate of insecurity around financial technology. At a time when many in the industry are betting on exponential growth in mobile payments, that can only be very bad news indeed.

The key lies in robust customer and transaction authentication, relative to the bank’s perceived risk of the transaction – speed, strong security, efficiency, good customer service, ease of use – while shutting down the scope for fraudsters to benefit from their crime. The key lies in real-time detection, prevention and immediate resolution enabled by the empowered customer.

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Comments: (2)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 September, 2011, 13:58Be the first to give this comment the thumbs up 0 likes

While I like the convenience of looking up my account balance from my mobile phone, I fear that fraud mitigation will erect so many hoops for me to jump that I might eventually prefer to drop into the branch or ATM instead. In the case of payments, I think the bad guys have already won: Two-factor authentication on a mobile phone was the last straw. I've gone back to ePayments and checks. Therefore, I agree with your prediction around how "a general climate of insecurity around financial technology" can be "very bad news" for NextGen payment methods.

However, given the current state of financial technology, I spot more than one pair of mutually-exclusive-and-collectively-exhaustive attributes among convenience, speed, security, efficiency, service, and ease of use! Not sure if this is an aspirational list at this point or are there examples of any banks that have actually managed to deliver all of this in a single payment solution?

Pat Carroll
Pat Carroll - ValidSoft - London 05 September, 2011, 16:35Be the first to give this comment the thumbs up 0 likes

Thank you for your comment. I agree with you: convenience, speed, security, efficiency, service and ease of use are all essential to any mobile payment product. Those are not aspirations either; technology is ready and products are available on the market. What hinders it all is the lack of visibility and understanding of such solutions especially in comparison to those traditional two-factor authentication solutions that are no longer at the forefront of the technology. Few are actually able to really understand and embrace the implications of telecommunications and mobile payment solutions, especially when it requires a detailed understanding of both.

Pat Carroll

Pat Carroll

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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.


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