2012's Top Anti-Fraud Tech Investments

Survey Reveals Banks Investing More in Emerging Technologies
2012's Top Anti-Fraud Tech Investments

Banks and credit unions say investments in enhanced fraud detection, monitoring systems and customer and member education top their lists for fighting fraud this year.

See Also: Key Trends in Payments Intelligence: Machine Learning for Fraud Prevention

That's according to BankInfoSecurity's second annual Faces of Fraud survey. A full report on the survey is now available.

More than half of the more than 200 financial institutions that participated in this year's survey say they have increased funding for new fraud technology and personnel.

Top Anti-Fraud Investments

In addition to enhanced detection, monitoring and education, other top anti-fraud investments for banks and credit unions this year include:

  • Improved out-of-band verification;
  • Enhanced controls over account activities;
  • More internal and external audits;
  • Improved vendor management practices.;
  • More anti-money-laundering tools;
  • Enhanced dual authorization through different access devices;
  • Improved tracking of high-risk customers and members.

Much of that increased spending is linked to online security enhancements required by the FFIEC's updated Authentication Guidance. That's despite the fact that a third of the institutions acknowledge they don't fully understand what they should be investing in to meet new regulatory demands (see Fraud Survey: Banks Get Bigger Budgets).

"The survey results reflect the confusion among most banks as to what's expected of them when it comes to practical technical solutions," says Gartner analyst Avivah Litan. "Many banks are wondering if they need to switch their modus operandi for challenge questions to follow the explicit guidance in the FFIEC update about using the more elaborate and expensive challenge questions from public data aggregators."

But Shirley Inscoe, a fraud analyst with Aite, cautions banking institutions not to be too quick to invest in a particular technology.

"Take the time to do a thorough risk assessment right now, if you haven't already, and factor in the changes your institution is planning, as well as the environment," Inscoe says. "Develop a strategic plan for the next three to five years to fight fraud and protect your customers."

For more information about the technology investments banks and credit unions plan to make, see the Faces of Fraud survey report.


About the Author

Tracy Kitten

Tracy Kitten

Director of Global Events Content and Executive Editor, BankInfoSecurity & CUInfoSecurity

A veteran journalist with more than 20 years' experience, Kitten has covered the financial sector for the last 13 years. Before joining Information Security Media Group in 2010, where she now serves as director of global events content and executive editor of BankInfoSecurity and CUInfoSecurity, she covered the financial self-service industry as the senior editor of ATMmarketplace, part of Networld Media. Kitten has been a regular speaker at domestic and international conferences, and was the keynote at ATMIA's U.S. and Canadian conferences in 2009. She has been quoted by CNN.com, ABC News, Bankrate.com and MSN Money.




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