Fraudsters go where the money is, which means financial institutions are a ripe target. In fact, 80 percent of financial institutions with more than $50 million in assets experienced payments fraud attempts and financial losses in 2016, according to a survey released earlier this year by the Federal Reserve Bank of Minneapolis. Fraudsters’ tactics seem to be effective too, as Javelin Strategy & Research revealed that $16.8 billion total was stolen from victims last year.
Even the very media that covers the industry isn’t safe. Royal Media, the company that produces Bank Innovation, was recently the victim of a heist. Not the kind that involves ski masks and getaway drivers, but the type that is perpetrated by faceless fraudsters who take a little bit here, a little bit there, hiding their thievery through small withdrawals. By the time it was all said and done, Royal Media was out $50,000, and there was nothing they could do about it.
But it wasn’t unavoidable.
Fraudsters have become masters at grabbing valuable banking information and committing theft through the ACH network. All they need is a few pieces of information, and they can pretend to be anyone. Including your customers. Given the prevalence of social media sites and the details that can be obtained from those sites, it is also easier than ever for fraudsters to pose as vendors and reach out to the appropriate employee to request a payment.
If committing fraud is so easy, how can you stop it? Honestly, the answer is quite simple. In fact, you’re probably already using the technology needed to deter fraud and save you – and your account holders – millions of dollars.
When you use your fingerprint (or even your face) to unlock your smartphone, you’re relying on biometrics to protect your privacy. That same level of security is available to protect all kinds of transactions – including wire, check and ACH transfers – using voiceprint technology. Oftentimes, added security measures create added friction for end-users, but voice biometric authentication successfully balances the need for security and a convenient customer experience.
When approached correctly, voice biometric technology can raise the bar on security. Voice biometrics are most effective when the verification process happens completely out-of-band from the channel that the transaction was initiated.
For example, if a fraudster initiates a wire transfer through an online banking system, an alert should notify the account holder through a separate channel, like SMS text or email. Then, the account holder can call an interactive voice response system to establish voice authentication and deny the transaction. This successfully eliminates the risk of a fraudster being able to verify their own unauthorized transactions. Imagine your customers using their own voice to secure their accounts and defeat fraudsters!
Additionally, selecting the right fraud prevention solution can become a revenue generator. Educate your account holders about the importance of their role in protecting their accounts, and they’ll gladly pay a little more to ensure their money is safe.
Legacy fraud-prevention technology isn’t capable of this level of protection. Investing in aggressive fraud prevention technology may seem like it comes at a great cost. But it far outweighs the loss of trust between you and your customers.