Fighting fraud

Once upon a time bank robbers needed guns and balaclavas. Today a mouse and keyboard can be more dangerous. Every year Kiwis are defrauded by cyber criminals and some lose their life savings.

In the case of phishing the victim clicks on what looks like a genuine email from their bank, Trade Me or another organisation. Except that it’s not their bank and their keystrokes are captured revealing their username and password. The phisher then logs into the genuine bank account doing what’s called an “account takeover” and helps themselves to your money.

Fortunately there’s money in security and as the fraudsters get cleverer so too are the programmers working for good developing increasingly sophisticated technology to thwart criminals.

Here’s a taster of what the fields of biometrics, artificial intelligence, and computer science are doing to help protect us against increasingly clever cyber-attacks.

Big data and analytics

Back in the day banks were very manual and their information siloed, but they accept that they need to move forward to counter fraudsters. These days banks and financial institutions are learning to manage and analyse terabytes of historical and third party data in real time. Combined with other technologies this analysis of big data can spot a fraudster in action and stop them in their tracks.

Biometric authentication

Biometrics uses statistical analysis of online behaviour to authenticate customers. In short, the software analyses things like the speed and rhythm of your key strokes and mouse use online. A fraudster will have a different rhythm and can be prevented from emptying your bank account before any damage is done Companies offering this type of technology include BioCatch and Behaviosec, which can pick up anomalies in data entry patterns. These systems can mutate as threats change.

360 degree view

Think of this as a holistic approach to protecting you. As banks evolve for the digital world they can access a 360-degree view of your buying behaviour, banking operation, and trading patterns providing them with a holistic view of your behaviour. If, for example a clone of your card is being used in Argentina in an unusual way the transaction could be flagged very accurately. Currently there are a lot of false positives with this approach, but it is becoming increasingly sophisticated.

Blockchain

Have you heard of Bitcoin? It’s the super secure electronic currency. Don’t try to get your head around that in one go. But suffice to say that the “blockchain” technology behind it can help protect banks against hacks. Blockchain is a huge decentralised database that is much more secure than old banking systems because fraudsters would have to hack into every single computer containing copies of the same data to get your money. As organisations such as banks move to using blockchain you get better protection.

Fingerprint recognition

The password is dying and methods of fingerprint and other identification such as voice, face and irises are expected to become more common. Already in the United States many banks use fingerprint, face, eyeball selfie, or voice recognition instead of passwords. In the future you can expect to use your fingerprint to authorise purchases or transactions. It’s not failsafe, however and even your fingerprint can be hacked.

As a consumer you also need to play your part and prevent fraud by everything from avoiding clicking on unsolicited emails, using secure PINs, changing passwords periodically, never revealing your PIN to anyone, and just keeping your wits about you.