Information theft highlights the latest bank security problems

Oct 10, 2006 3:51 PM

           

The threats of information theft and data breaches have transformed the banking industry, according to Steve Solberg of Fortent, New York, a company specializing in anti-money laundering and anti-fraud technology.
"The financial cost of fraud to a company may be three or more times the value of the fraud loss amount," Solberg, Fortent's fraud product manager, says in a white paper.
"Fraud is not static," he continues. "It continues to evolve with criminals, typically following the path of least resistance. Once new anti-fraud measures are implemented, criminals move to another scheme until they figure out how to beat those measures."
Trends from the white paper include:
* Check fraud isn't going away -- Despite the fact that electronic payments are rising at 12.9 percent per year, the total amount of attempted check fraud is more than $5.5 billion annually, according to a 2004 ABA Fraud Survey.
* New opportunities for employee fraud are emerging -- The threat of information theft is causing as much concern as the theft of funds. In today's automated bank environment, customer account information is readily accessible in branches, offices, and call centers throughout the world.
* Criminals thwart rules-based systems -- Intelligent systems can learn criminals' behavior and guard against risk in real time. Banks are required to use these advanced systems to stay ahead of fraudsters, who are keenly aware of reporting requirements that raise alerts.
* "Silo" mentality weakens fraud detection -- Because many banks' Check Fraud Detection and Credit Card Detection departments often do not share systems, the same criminals can prey on customers in different divisions without raising a bank-wide red flag.
* C-suites are moving toward an enterprise focus on anti-fraud systems -- Fraud carries significant reputational risk, reduces customer confidence, and can damage an institution's market capitalization and profitability. A more powerful fraud detection infrastructure "can contribute to cost reductions and total operations efficiency . . . [including] reduced investigative staff and premises expenses, as well as lower systems costs in the long run," Solberg says.

Want to use this article? Click here for options!
© 2008 Penton Media Inc.

SUBSCRIBE

Select an Issue April 1, 2008 March 1, 2008 February 1, 2008 January 1, 2008 December 1, 2007 November 1, 2007 October 1, 2007 September 1, 2007 August 1, 2007 July 1, 2007 June 1, 2007 IP Security Supplement May 1, 2007 April 1, 2007 March 1, 2007 February 1, 2007 January 1, 2007 School Security December 1, 2006 November 1, 2006 October 1, 2006 September 1, 2006 August 1, 2006 July 1, 2006 June 1, 2006 May 1, 2006 April 1, 2006 March 1, 2006 February 1, 2006 January 1, 2006 December 1, 2005 November 1, 2005 October 1, 2005 September 1, 2005 August 1, 2005 July 1, 2005 June 1, 2005 May 1, 2005 April 1, 2005 March 1, 2005 February 1, 2005 January 1, 2005 December 1, 2004 November 1, 2004 October 1, 2004 September 1, 2004 August 1, 2004 July 1, 2004 July 1, 2004 June 1, 2004 May 1, 2004 April 1, 2004 March 1, 2004 February 1, 2004 January 1, 2004 December 1, 2003 November 1, 2003 October 1, 2003 September 1, 2003 August 1, 2003 July 1, 2003 June 1, 2003 May 1, 2003 April 1, 2003 March 1, 2003 February 1, 2003 January 1, 2003 December 1, 2002 November 1, 2002 October 1, 2002 September 1, 2002 August 1, 2002 July 1, 2002 June 1, 2002 May 1, 2002 April 1, 2002 March 1, 2002 February 1, 2002 January 1, 2002 December 1, 2001 November 1, 2001 October 1, 2001 September 1, 2001 August 1, 2001 July 1, 2001 June 1, 2001 May 1, 2001 April 1, 2001 March 1, 2001 February 1, 2001 January 1, 2001 December 1, 2000 November 1, 2000 October 1, 2000 September 1, 2000 August 1, 2000 July 1, 2000 June 1, 2000 May 1, 2000 April 1, 2000 March 1, 2000 February 1, 2000 January 1, 2000 December 1, 1999 November 1, 1999 October 1, 1999 September 1, 1999 August 1, 1999 July 1, 1999 June 1, 1999 May 1, 1999 April 1, 1999 March 1, 1999 February 1, 1999 January 1, 1999 December 1, 1998 November 1, 1998 October 1, 1998 September 1, 1998 August 1, 1998 July 1, 1998 June 1, 1998 May 1, 1998 April 1, 1998 March 1, 1998 February 1, 1998 January 1, 1998 December 1, 1997 November 1, 1997 October 1, 1997 September 1, 1997 August 1, 1997 July 1, 1997 June 1, 1997 May 1, 1997 April 1, 1997 March 1, 1997 February 1, 1997 January 1, 1997

This month in Access Control

• Opening Up About Door Closers
• An Enterprise Approach
• The Framework For Open Systems
• On A Higher Plane
• More from April's issue