Fighting fraud

Once upon a time bank robbers needed guns and balaclavas. Today a mouse and keyboard can be more dangerous. Every year too many Aussies are defrauded by cyber criminals, resulting in annual losses of more than $2b, according to the Australian Institute of Criminology.

One common fraud method is ‘phishing’, where the victim clicks on what looks like a genuine email from a company such as their bank, an online trading site, 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 was 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 often spot a fraudster in action and  may be able to stop them in their tracks.

Biometric authentication

Biometrics uses statistical analysis of online behaviour to authenticate customers. In short, the software analyses things such as the speed and rhythm of your keystrokes and mouse use online. A fraudster will have a different rhythm and with the right software 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 by sophisticated software. Currently there are a lot of false positives with this approach, but it is improving rapidly.

Blockchain

Have you heard of Bitcoin? It’s electronic currency that aims to be super secure. 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’s 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’ll hopefully 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. Banks are already using some of this technology in Australia.  As well as fingerprints, face, eyeball selfie, or voice recognition can be used 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 in preventing 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.