Faces of Fraud: What are the Trends?

Have corporate account takeover incidents abated? Are U.S. banking institutions ready to conform to the FFIEC Authentication Guidance? These are two of the questions posed by the 2012 Faces of Fraud Survey.

See Also: Detect Application & Account Fraud Without Increasing Customer Friction

A follow-up to the 2011 Faces of Fraud Survey issued by BankInfoSecurity and CUInfoSecurity, this year's survey tracks the latest fraud trends and investments being made in the financial services space.

What layered security controls are banks and credit union putting in place as they prepare for regulators' first wave of examinations? The findings could reveal surprises, as they did in 2011, when more than 75 percent of surveyed financial institutions said they discovered fraud only after their customers notified them. Additionally, a majority of institutions also said they continued to struggle to overcome barriers posed by organizational silos, despite well-known risks posed by cross-channel fraud.

A sneak-peak of the 2012 survey's findings will be presented March 2 at the RSA Conference in San Francisco.

Skimming, Breach Trends

Since the release of results from the inaugural Faces of Fraud survey, institutions have continued to grapple with fraud threats linked to card skimming, corporate account takeover and third-party breaches, like those the point-of-sale breach that hit last summer hit the Michaels craft stores chain retail breach.

Meanwhile, the updated FFIEC guidance, issued last June, requires U.S. banking institutions to:

• Conduct regular assessments of their online banking risks;
• Implement layered security controls;
• Improve customer and member awareness and education campaigns.

Based on all the conformance and risk issues facing banks and credit unions, the 2012 Faces of Fraud Survey will gather information about fraud detection and prevention from leading experts. The 2012 survey will:

• Chart the latest fraud trends, including dollar losses by type of fraud incident;
• Gauge institutions' preparedness for FFIEC examinations, including where banks and credit unions are prioritizing their efforts - risk assessments, transaction monitoring or know-your-customer measures; and
• Predict the top areas of focus for 2012, from customer awareness programs and real-time fraud monitoring tools to investments in mobile banking and new security controls, such as out-of-band authentication, device identification and anomaly detection.

The survey also will examine:

• Fraud Trends - Payment cards, checks and phishing were the top forms of fraud for financial institutions in 2011. What are today's hottest trends?
• The Mobile Challenge - As more institutions plunge into mobile banking, how are they protecting users? Are they capping transaction amounts? Are they owning the risks or transferring them to third-party service providers such as wireless services?
• The Rise of EMV - The chip-based payment card is a global standard that aims to replace magnetic-stripe cards. What percentage of U.S. institutions are today providing this new payment technology to a segment of their customer/member base?

Sneak Peak at RSA

Results from the Faces of Fraud Survey will be analyzed and shared within first quarter of 2012. BankInfoSecurity and CUInfoSecurity will issue a detailed report that includes analysis and insight from industry thought-leaders. In addition to the report, the Faces of Fraud Survey results also will be shared via podcast interviews with industry thought-leaders and a webinar presentation of the findings, including a roundtable discussion among thought-leaders on the 2012 fraud agenda.

Additionally, the initial survey findings will be previewed in a special presentation at the upcoming RSA Conference. Presented by Tom Field, editorial director of BankInfoSecurity.com and CUInfoSecurity.com, and U.S. Secret Service Agent Erik Rasmussen, "The Faces of Fraud: An Inside Look at the Fraudsters and Their Schemes" will highlight fraud trends affecting payments and banking. From ATMs and point-of-sale devices to payment cards and online accounts, fraud continues to escalate. Today's fraudsters are sophisticated, organized and persistent. Field will review the technologies and systems banks and credit unions are investing in to address emerging fraud schemes. Rasmussen will discuss the banking industry's hottest schemes, offering insight about the criminals that perpetuate and launch cyberattacks, as well as other, more traditional fraud schemes.

The RSA Conference session will be held Friday, March 2, at 9 a.m. in Room 102 at the Moscone Center in San Francisco.

Please take a few minutes now to take the 2012 Faces of Fraud Survey.