Friday, April 17, 2009
According to recent figures released by the European ATM Security Team (EAST), card-skimming fraud at European ATMs increased 129% in 2008, with a total of 10,302 reported incidents.
As the credit crunch bites and fraud departments are faced with the challenge of delivering operational efficiency and reducing costs, such losses associated with fraudulent transactions are no longer tenable. The current industry buzz-word is ‘real-time fraud prevention’ which can prevent losses from occurring in the first place. The good news is that real-time fraud prevention is now a reality which has been successfully proven in the field. Banks need to look more closely at how they can use techniques such as Point of Compromise (PoC) analysis to tackle the rising trend of fraud, not least ATM fraud. PoC enables financial institutions to identify fraud trends as well as the actual location where the cards were compromised. For example, if three customers of a bank experience fraud after using their cards at one ATM, the bank can quickly identify and flag all other cards used at that site, and either automatically block these cards or monitor them even more closely for suspicious activity. And when this is done in real-time, it can have a huge impact on stopping the fraudsters and preventing the loss before the fraud is attempted.
Given the current market environment and potential for reputational damage, this type of advanced fraud prevention should find itself catapulting up the priority list for all financial institutions.
Risk Solutions Manager