March 2016 Issue

Our 'Newsletter on Financial Fraud' is your monthly insight into the various new fraud types and methods used by fraudsters globally in the banking space. 

In this issue, we bring to light the effect of banking fraud creeping in and making banks lose millions to this plaguing menace.

2016 Identity Fraud: Fraud Hits an Inflection Point

On its face, fraud in 2015 appears not to have changed substantially. The total number of victims remained steady at 13.1 million, and the total fraud amount fell slightly to $15 billion. However, that stability masks major changes in fraud in the U.S.  As EMV becomes more ubiquitous, fraud at physical storefronts becomes very different – driving a movement from counterfeit card fraud to new account fraud. With growing online retail volume comes greater opportunity for criminals – pushing fraud to card-not-present channels. The stakes are high for both financial institutions and merchants, since poorly handled fraud undermines financial relationships and can even result in victims’ being less willing to take necessary steps to protect themselves.

The 2016 Identity Fraud Study found four significant trends: 

  • More identity fraud victims, less stolen – The number of identity fraud victims was at its second highest level in six years, but the amount stolen was at its lowest point in the past six years. Identity fraud is a serious issue as fraudsters have stolen $112 billion in the past six years. That equals $35,600 stolen per minute, or enough to pay for four years of college in just four minutes.  
  • EMV drives a doubling of new account fraud – In 2015 the U.S. switched to EMV, which is designed to reduce in-person fraud and the profitability of counterfeit card operations. Fraudsters have reacted by moving away from existing card fraud to focus on new account fraud. This drove a 113 percent increase in incidence of new account fraud, which now accounts for 20 percent of all fraud losses.  
  • Consumer choices negatively impacting fraud detection – The study found those consumers that do not trust their financial institutions and do not take advantage of the services offered by them are setting the stage for more damage if they become fraud victims. The study found consumers that do not trust their financial institutions are less likely to use transaction monitoring, email alerts, credit freezes and black market monitoring. This results in their information being used for 75 percent longer by fraudsters and incurring a 185 percent greater mean consumer expense than those victims that have high trust in their financial institutions.  
  • U.S. consumer data being used for fraud internationally – Identity fraud is a global issue. The study found that 18 percent of the identity fraud using U.S. credit cards, or $2.4 billion, was conducted outside the U.S. There was an average of $1,585 per incident, although for most consumers there was no out of pocket cost as the major issuers offer $0 liability. Issuers are doing a good job of quickly detecting this type of fraud. They are proactively detecting 69 percent of these cases.   

Source:  JAVELIN

Karnataka Bank bags IBA Banking Technology Award for risk and fraud management

Karnataka Bank has bagged IBA Banking Technology Award in the category of Best Risk and Fraud Management Initiative - runner up amongst small banks. The award was announced as part of Indian Banks' Association Technology Conference, Expo and Awards 2016. Mahabaleshwara M S, chief general manager and B Nagaraja Rao, DGM of the Bank received the award from H R Khan, Deputy Governor RBI and Ashwani Kumar, chairman, IBA in a glittering function held at Mumbai on Tuesday. "We are happy that the Bank's efforts towards strengthening its control and monitoring systems by significant improvements in risk management and vigilance functions have been suitably recognized and rewarded in the form of this prestigious award. In the present era of digital banking, a robust fraud prevention and risk management mechanism instills confidence among the tech savvy customers and bank will continue its efforts in this direction with renewed vigour", said P Jayarama Bhat, MD and CEO of the bank.

Source: Times Of India

MasterCard’s ‘Selfie Pay’ aim to reduce credit card fraud without passwords

MasterCard says it will roll out an application for cardholders to use a picture of their face (selfie), or their fingerprint, to verify their identity when making mobile online purchases. The payment processing giant confirmed the decision to introduce biometric screenings for purchases this week at the Mobile World Congress in Barcelona.

MasterCard said that it successfully pilot-tested the feature last fall. The app update will become available through big banks in the United States, Canada, United Kingdom and some European countries later this year.

‘Selfie Pay” amounts to an app that scans biometric data from the photo and fingerprint every time you purchase something online.

Reported the app can’t be fooled easily. It takes into account physical depth and requires the user to blink each time, a factor that prevents previously taken photo or video from being used by hackers.

MasterCard is also reportedly looking at a system that monitors heartbeat or scans the iris of your eye as a means of identity verification.

MasterCard’s new system fuel higher online sales because passwords would be replaced with an easier-to-use solution. According to a survey by MasterCard, 53 percent of shoppers forget passwords at least once a week, spending more than 10 minutes to reset their accounts. And that leads a third of shoppers to abandon purchases.

Source: eCreditDaily Staff

CustomerXPs featured in NASSCOM Indian Analytics Products Landscape

CustomerXPs has been showcased in the Nasscom’s Research Paper ‘Indian Analytics Products- Scaling New Heights’. The Chartis Risktech100 2016 company has been recognized for its solutions in the Enterprise Business Intelligence, Risk & Security Management and Customer Lifecycle Management areas.  

Clari5 from CustomerXPs is the Real-time cross channel enterprise fraud and financial crime management platform. Clari5 is for all banks who are exposed to financial frauds.

Here is an infographic summing up our references in the Nasscom 's Research Paper: 

Customerxps Featured in Nasscom

Source :  CustomerXPs

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