banking fraud - neustar · service agent pool service agent client crm name: address: landline:...

Banking FraudThe threat, the impacts and what to do about it

Including results from a research study sponsored by Neustar

and conducted by American Banker and SourceMedia Research

© 2016 Neustar Inc. All Rights Reserved 2

PRESENTERS

Adam Russelld

Executive Director, Financial Services at Neustar

Sam Jacksond

Director of Product, Risk Solutions at Neustar

Which of the following entry points represents, for your organization, the

greatest current vulnerability to account takeover and origination fraud?


Online channel

Mobile channel

Call center

Chat support

Telephone banking

Branch / in-store

None of the above

POLLING QUESTION

Study uncovered the latest and most challenging fraud issues facing

banks, credit unions and non-bank lenders


Online survey in June 2018 among American Banker audience

506 senior level executives from banks, credit unions and non-bank lenders of all sizes participated in the survey

Focused on account origination fraud and takeover threats - specifically, the business impacts, threats, and technologies being used by these organizations to address these

BACKGROUND


DEALING WITH FRAUD

34%

40%

41%

41%

44%

45%

49%

53%

Audit

Information technology

General management

Information security

Fraud prevention

Operations/processing

Compliance

Risk management

Who is dealing with fraud prevention and

fraud resolution?


DEALING WITH FRAUD

56% 58% 54% 51%

Total Banks Credit unions Non-banklenders

Priority for preventing or mitigating fraud

compared to other initiatives

% who indicated “Much higher” or

“Somewhat higher” priority


FRAUD RISKS

11%

12%

13%

15%

18%

19%

Customer/member losses

Business money/value losses

Productivity losses

Customer/member satisfaction risks

Regulatory actions

Corporate reputation risks

Increased risks in the last 12 months

% who indicated risk

“Increased significantly”


THE IMPACTS OF FRAUD

11% 12% 15% 36% 9% 8%4%

Real-time Less than1 day

1 day Multipledays

1 week 2-4weeks

More than4 weeks

Resolve a fraud incident

The average time it takes organizations to…

10% 13% 51% 9% 7% 4%

Less than1 day

1 day Multipledays

1 week 2-4weeks

More than4 weeks

Investigate a fraud incident


THE THREAT OF FRAUD

What are the high-threat entry points for…?

7%

8%

9%

9%

16%

22%

Branch/In-store

Chat support

Telephone banking

Call center

Mobile channel

Online channel

Account origination

8%

9%

9%

11%

15%

22%

Branch/In-store

Call center

Chat support

Telephone banking

Mobile channel

Online channel

Account takeover

% who indicated “Very high” threat


CALL CENTER FRAUD

66% 68% 57%

Banks Credit unions Non-bank lenders

Concern about call center fraud

% who indicated “Very concerned”

or “Somewhat concerned”


CUSTOMER/MEMBER FRICTION

22% 32% 23%

Banks Credit unions Non-banklenders

Priority for reducing customer/member friction

% who indicated

“Very high priority”


SOLUTIONS

16%

23%

26%

28%

29%

34%

40%

41%

42%

62%

Physical biometrics

Behavior based biometrics

IP geolocation information

Device fingerprinting and device identity

Data assets/data sources

IP reputation data or IP blacklists

3rd-party user identification data

Knowledge-based authentication (KBA)

User data (internal CRM)

Multifactor authentication (MFA)

Top identity solutions used


SOLUTIONS

8%

10%

12%

12%

13%

14%

15%

15%

29%

41%

48%

Device location

Address verification

Email verification

Name verification

Device identity

IP geolocation

Mobile phone verification

Behavior fingerprint

Knowledge-based authentication (KBA)

Biometrics (facial, fingerprint, etc.)


Strongest perceived identification verification measures

Multiple information

factors are likely to

thwart fraud.

The more questions

asked/answered the better the

chance of uncovering errors on

the part of a fraudster

It is the best cybersecurity

measure to me because it is

more complex and harder for a

fraudster to easily bypass than

2-factor authentication.

Based on bank's experience,

this seemed to decrease fraud

activity once implemented and

seems to discourage attempts.


SOLUTIONS

17%

18%

18%

24%

26%

26%

27%

44%

63%

66%

Biometric categories

Voice recognition

Face recognition

Device reputation solutions

Geolocation solutions

Behavioral biometrics

Fingerprint recognition

Digital identity verification solutions

Account transaction monitoring/fraud detection


Top solutions used for preventing/mitigating

account origination or takeover fraud


ANTI-FRAUD INVESTMENTS

23%

26%

30%

31%

33%

36%

48%

51%

Hire fraud-prevention personnel

Enterprise-wide analytics for cross-channel fraud prevention

Increase total fraud prevention spending/budget

New fraud-prevention policies

Upgrade or purchase new fraud prevention technology

Modify fraud prevention processes

Increase fraud monitoring

Provide fraud prevention training/education to staff

Top planned anti-fraud investments for next 12 months

Reduce Losses and

Minimize Client Friction

©2018 Neustar Inc. All Rights Reserved© 2018 Neustar Inc. All Rights Reserved 17

45BDaily Inquiries

11BDaily Updates

220MPeople

26%Global Digital Media

Impressions

16KAttributes


NEUSTAR’S AUTHORITATIVE ONEID SYSTEM

DEVICE IDENTITY CUSTOMER COOPERATIVES


Device Fingerprinting Monitored Transactions

RISK MONITORING

Device

Reputation

DEVICE REPUTATION – A COMMON APPROACH


2018: THE YEAR OF BIG-TICKET DEVICE REPUTATION ACQUISITIONS

2016 2017 2018

+ +++


COMMON PHONE FRAUDS

SIM SWAP

CALL FORWARD


COMMON PHONE FRAUDS

PORTING

“Unstealable” Behavior


“UNSTEALABLE” INSIGHTS


Mitch Young

1234 Street Rd

Anytown, ST, 12345

703-555-2342

[email protected]

HOME PHONE

COMCAST

TRIPLE-PLAY

PHONE

WIRELESS

PHONE

SKYPE

PHONE

BURNER

PHONE

Verification

Phone Type

Activity

Usage

Pre-pay flag

Port history

MNO Data


OUTBOUND RISK – HOW IT WORKS

OUTBOUND

CALL VIA

MOBILE PHONE Sim Swap?

OUTPUT

Less Likely =

More

Trustworthy

More Likely =

More Risk

Recently Ported?

Call Forward?

OUTPUTReal-time query

Has IMEI and/or

IMSI has changed?

No = Lower

Risk

Yes = Higher

Risk

OUTPUTOutbound

Risk

Joe Smith

222-555-9999

Low

Risk

High

Risk

No = Lower

Risk

Yes = Higher

Risk


INBOUND RISK SOLUTIONS

Benefits

Higher IVR containment

Decreased AHT (Average

Handle Time)

Agents focused on higher-

value calls

Greater customer satisfaction

Name: Joe Smith

Address: 123 Main

Landline: 222.666.7777

Mobile: 222.555.9999

Fill incomplete CRM records in real-time

Flag spoofed or recently ported phones

SCAM ALERT

Identify upsell/cross-sell opportunities


INBOUND RISK – HOW IT WORKS

IVR

Service

AgentPool Service

Agent

Client CRM

Name:

Address:

Landline:

Mobile: 222.555.9999

222.555.9999

Joe Smith

123 Main St

Vienna, VA

22182

H: 222.666.7777

M: 222.555.9999

Joe Smith

123 Main St

Vienna, VA 22182

H: 222.666.7777

Account: 1234

Authenticated: Y

IVR, High Risk or

Pool Service Agent High Risk Pool

Service Agent

High Risk

Pool

Anti-Spoofing

Detection

& Risk Scoring

1 2 3 4


DIGITAL IDENTITY RISK – HOW IT WORKS

Low Risk

Low Friction

Experience

High Risk

Additional

Verification

Required

Digital Identity

Matches

Consumer

Data?

Joe Smith

222-555-9999

Low

Risk

High

Risk

Authenticate

Manage

Protect

Recover

Application PII

Browser Cookie & IP

CONSUMER MOBILE PHONE MOBILE NETWORK OPERATORS


Device Identification Identify Phone Number & Subscriber ID

NEUSTAR

Identity

Verification

& Anomaly

Detection

DIGITAL IDENTITY TECHNOLOGIES MNO HEADER IDENTIFICATION

DEVICE IDENTITY PERSONAL IDENTITY


DIGITAL IDENTITY TECHNOLOGIES LINKING BROWSERS TO IDENTITIES

Cookie ID

IP AddressHousehold

Address

PII

Confidential and Proprietary – External Distribution is prohibited. © 2018 Neustar Inc. All Rights Reserved 30

ONLINE TO OFFLINE LINKAGES KEY DATA POINTS

Device to Email

Device to Address

Observed Distance from Home

Location

Device Tenure on Network

Transitive Linkage to Address

Transitive Linkage to Name

IP to Email

IP to Address


DIGITAL IDENTITY TECHNOLOGIES IP GEOLOCATION ANALYSIS

Geolocation solutions

are evolving. Highly

granular GPS data can

be combined with the

IP history associated

with a given device to

produce effective

signals for fraud

mitigation.

Questions?


Thank You


banking fraud - neustar · service agent pool service agent client crm name: address: landline:...

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