A recent Aite Group report, “Mobile Fraud: The Next Frontier”, advises financial institutions (FIs) to prepare themselves to fight mobile fraud. The Aite report, based on a survey of 24 global risk executives, states that while fraud has yet to become common through mobile banking channels, cyber criminals likely have mobile banking and mobile payments on their radar, and many FIs lack fraud protection that equally covers both mobile and online banking programs.
“The most surprising thing in compiling this report was that two-thirds of the respondents said they did not have integrated fraud protection between mobile and online channels at their financial institutions,” said Julie Conroy McNelley, senior analyst and fraud expert with Aite Group.
FIs have not yet built multiple layers of fraud protection for their mobile banking programs, because so far they have not noticed a lot of breaches in that arena – but stiffer fraud measures may soon become essential, if history is any guide McNelley says.
FIs experienced a similar situation five years ago when deploying fraud protection measures with online banking programs. Initially, FIs saw relatively low levels of online fraud, but when organized crime threw its weight behind online banking attacks, fraud prevention became a higher priority.
Additional key data from the Aite report:
- 75% of respondents agreed that mobile banking creates exposure to risks that are not yet completely understood because cyber criminals are always developing new attack methods.
- 57% of respondents fear mobile banking service innovations may outpace the ability of risk management and fraud protection tools to protect them.
- Only 37% of respondents have the same fraud protection measures in place for mobile and online banking programs, which is troubling inasmuch as fraudsters typically create attacks that capitalize on the lack of similar protection measures in place when monetary transactions cross channels at the bank.
- 67% of respondents said they are already working on deploying increased fraud prevention technology over the next two years to protect the mobile channel and 25% are waiting to see what kinds of threats emerge; only 8% have no plans to increase mobile fraud prevention technology.
With its real-time mobile alerting capabilities, Clairmail empowers FIs to enlist the customer in the fight against fraud and to fully leverage the mobile channel for fraud prevention, detection and resolution.
Learn more by downloading the Clairmail white paper, Fraud Solution: Leveraging Mobile to Combat Fraud.