By : Dena Hamilton
February 02, 2017 08:00 AM
With a new calendar year underway, one thing the financial services industry can be sure of is that fraud will continue to pose a serious, evolving threat to businesses and their customers in 2017.
So what are some of the key security risks to be aware of this year, and how can you protect against them?
Growing cyber threats
As the global economy continues its digital transformation and consumers become more and more reliant on online and mobile banking, the financial services industry faces a growing obligation to keep up with the latest cyber threats.
Cybercrime was a major concern for many businesses in 2016. Threats like ransomware and distributed denial of service attacks rose in prominence and that trend can be expected to continue.
To strengthen your protection against cyber threats, you can take steps such as deploying omnichannel solutionsthat are equally effective at spotting warning signs of malware and human fraudsters. These protective measures should also extend to physical assets such as your ATM network, which can be equipped with specialist software to minimize the risk of logical attacks.
Customer demands for speed
Customers are placing increasing demands on banks and payment service providers for maximum speed and convenience. However, it's crucial to remember that ambitions to deliver the best possible customer experience shouldn't overshadow security.
In a recent report, titled 'Derisking Convenience', analytics software developer SAS warned that the drive for expediency for customers is opening up new potential points of attack for fraudsters.
The firm highlighted a number of strategies financial institutions (FIs) can use to balance consumer demands with fraud protection. One approach is to focus investment on security measures that offer the strongest chance of results, such as geolocation and biometrics.
Further targeting of ecommerce
As the ecommerce market continues to expand, it will prove increasingly attractive to fraudsters looking for ways to exploit weaknesses. Worldwide B2C ecommerce sales are set to pass the $2 trillion mark this year, according to Statista. With initiatives like the launch of EMV cards in the US adding more protection against card-present fraud, criminals are shifting their focus to the web.
Merchants and card acquirers therefore have a responsibility to put the best possible security measures in place to protect payments. This might include using solutions that profile and analyze customer behavior and identify any unusual activity.
Increasingly sophisticated fraudsters
Fraudsters and financial criminals are becoming more sophisticated all the time, coming up with new ways of getting around the latest security measures and safeguards. It's for exactly this reason that FIs must place a strong emphasis on their own innovation.
There are many tools at your disposal to deliver the most effective, up-to-date protection against fraud, including detection and prevention solutions that use functions like machine-learning analytics to spot fraud and reduce false positives.
There is cause for optimism in the fight against fraud. In a recent blog post, ecommerce security firm Signifyd said the barrier to entry for fraudsters "appears to have finally risen".
It added: "Just a few years ago fraudsters could get away with thousands of dollars of stolen goods with just a stolen credit card. But today's fraud prevention solutions provide advanced detection and prevention methods, forcing fraudsters to steal credit card numbers, addresses and personally identifying information to bypass merchant defenses."
There's no doubt that fraudsters will continue to innovate and evolve, so FIs that want to protect their customers and infrastructure must do the same.