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CUNA Council White Paper Explores Fraud And Technology
MADISON, Wis. (9/11/13)--The increased sophistication of technology behind fraud and fraud prevention is the topic of a new white paper from the CUNA Operations Sales & Service Council. 

"Fraud Trends: New and Repurposed Scams and Schemes" examines some of the trends and forces behind the continued uptick in fraud--including the ease of online access, the "new mafia" and economic factors.

"People are storing more of their sensitive information on remote devices," says Jim Fuher, fraud prevention manager at Spokane (Wash.) Teachers CU. Online fraud, remote deposit capture and mobile scams will continue to increase during the next decade, he predicts.
By the same token, the tools to combat fraud--behavioral analytics, online fraud monitoring reports and automatic member alerts--are quite effective, and didn't exist until recently.
Technology tools under development and consideration include:
  • Anti-malware software for mobile devices. At the March 2013 BAI Payments Connect conference, Al Pascual, senior analyst for security risk and fraud, at Javelin Research and Strategy, urged the development of this software--particularly for iOS mobile devices, which are more vulnerable to attacks.
  • Geo-location tracking. Through surveys, consumers have shown their acceptance of this technology, which would help financial institutions track member and customer account activity and report suspicious transactions, the paper said.
  • Voice biometrics. This is the only biometric measurement that works across all channels, including the call center--which can be particularly vulnerable during distributed denial of service attacks, the paper said.
  • Malware and/or account takeover detection software. Some financial institutions are beginning to offer this free to their members and customers. Many find that the cost of providing it is mitigated by the fraud prevention and detection protection it provides, the paper noted.
  • Positive pay via online banking. This program prevents check fraud and strengthens internal controls by comparing checks presented on accounts against checks that members issue daily notes Smart Business Network Inc. (SBN).
  • ACH blocking service. The member decides which companies are authorized to post automated clearinghouse transactions--blocking those that are not authorized, according to SBN.
  • Automated alerts. Members can set limits for such things as maximum balance, minimum balance, daily transactions and others, and receive alerts if their account exceeds set parameters.
  • Multifactor authentication. These systems require members to authenticate their identities using more than one method--for example, a personal identification number and a security question. Federal Financial Institution Examination guidelines and other industry regulations call for this, so most financial institutions now have it in place.
  • Enterprise-wide fraud detection and management systems. Many vendors offer these systems and services--helping financial institutions manage the anti-money laundering and fraud challenges from a global perspective, covering the entire organization's needs.

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