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Strengthening Fraud Prevention in 2024: Six Essential Tools for Banks
We’ve reached an era where bank and app fraud regularly make headline news, putting banks under more pressure than ever to protect their customers. New rules from the Payment Systems Regulator (PSR) require banks to refund victims of Authorised Push Payment (APP) fraud for losses under £85,000 within five days [2]. And it gets tougher: losses greater than £85,000 will fall under the umbrella of the UK’s compensation scheme, compensating those who lose money to authorised banks [1]. Victims will still be helped, but banks face the challenge of doing everything possible to prevent customers from becoming victims in the first place. Fraudsters are getting cleverer than ever in their approach, according to the BBC’s most recent coverage [3]. They regularly pose as trusted organisations or create long-running scams that trick customers into handing over confidential information, such as online banking passwords. That makes advanced solutions for fraud prevention a must-have for banks.
Here’s how your business can use mobile intelligence to protect customers from all kinds of fraud:
APP fraud is just one part of a growing wave of digital scams affecting customers across the UK. The new PSR rules are a crucial step forward, but they place additional responsibility on banks to proactively reduce the number of fraud incidents. Some of the new fraud victims featured in the BBC piece suffered from APP fraud, but others were attacked with techniques such as phishing, social engineering, and more. Fraudsters are constantly trying new methods to get around security holes or avoid two-factor authentication (2FA).
Here are six products that can help secure your bank:
1. SIM Swap Check: Fraudsters often use SIM swap tactics to take over accounts by transferring a victim’s mobile number to a new SIM card, enabling them to intercept SMS-based two-factor authentication (2FA). Our SIM Swap Check solution allows the bank to check if the customers SIM has been swapped in the last few hours, days, or weeks. It can be added to any point in the customer journey as a red flag to the bank. The bank can then step in and stop the fraud before it happens. This feature is especially valuable during login attempts or when users request password resets.
2. Silent Authentication: All the customer wants is an easy experience. They don’t want to get spammed by SMS messages, asking them to input codes and start a registering dance every time they need to go online with the bank. Silent Authentication makes sure that the customer’s phone which is registered to the account is with the right user at high-risk transactions – without the need for anything extra from the customer! No codes. Just a casual look at their phone. Our Silent Authentication solution reduces this process to just 5 seconds without the need to wait for an SMS passcode. Instead, we do real-time checks to make sure that the customer’s phone details for the SIM match the registered details stored on the APP. This way we can stop customers re-using voucher codes or sharing QR promo codes with friends.
3. KYC Verification: Know Your Customer (KYC) during the onboarding process is mandatory, but if fraudsters make user attempts using made-up or stolen IDs, your bank risks the headlines if they are validated. We can check submitted customer data against mobiles network operator data to make sure that the data on your user is accurate, reducing the risk that a fraudster is registered under their name.
4. Phone Number Lookup: Simple and foolproof: it checks if a new customer’s phone number during acquisition would have been accepted into your bank normally by an innocent customer. It can help you avoid the pitfalls of fraudsters and those that use phony numbers for their activities.
5. Call Forwarding Status: If fraudsters have call forwarding on, they can intercept OTPs and verification calls that a bank may send on transactions. We can check if a customer’s phone is forwarding to another number, flagging compromised accounts and flagging risky transactions. Our Call Forwarding solution checks if a customer’s phone is forwarding to another number, flagging compromised accounts, and flagging risky transactions.
6. Scam Signal Detection: Many social engineering attacks have a lengthy phone conversation, where a fraudster slowly persuades a customer to hand over information or authorise transactions. Our solution monitors if a mobile call is happening at the same time as the transaction is being authorised. The alert can be added to the banks existing security layer allowing the bank to raise a red flag and hold the transaction to make further checks during those critical moments when the fraudster asks the customer to send the money.
Why Are Banks Under Pressure to Act Now?
The sophistication of fraud has been increasing, putting banks under pressure. With new rules in place, they face the challenge of doing everything possible to prevent customers from becoming victims. With APP fraud alone accounting for hundreds of millions of pounds in losses [1], institutions that invest in proactive security measures will not only save on reimbursement costs but also build greater trust with their customers. Tools like SIM Swap Detection and Scam Signal Detection provide essential layers of protection that help banks prevent fraud before it impacts customers.
To find out more about how our products can help your bank protect against fraud, please speak to our experts today.
[1] https://moneyweek.com/personal-finance/app-fraud-refund-rules-2024
[2] https://www.psr.org.uk/information-for-consumers/our-new-app-fraud-reimbursement-protections/
[3] https://www.bbc.co.uk/news/articles/cglk7dlpwl5o