Biometric authentication could help solve online fraud

By Nicole Miskelly | 1 December 2014

Darren Hodder, Director of Fraud Consulting told delegates at the SMi 2nd Annual Big Data in Retail Financial Services last week that the easiest way to solve online fraud is for banks to know exactly who their customer is, which could be achieved through biometric authentication.

Hodder believes that we are currently in “authentication hell” and that the authentication processes used by biometrics such as facial, iris, finger print or vein recognition could help to reduce the risk of fraud and enhance customer experience by enabling banks to recognise exactly who their customers are.

Statistics show that more than 21.5 million people in the UK now bank online. Although this is mainly a safe and secure way to access your bank account, criminals are attempting to take information directly from online bankers through spyware and scams duping them into giving away their password and security information.

During his keynote session, Hodder highlighted the recent fraud attacks the eldery via telephone scams and also the hacking of Apple’s cloud services suite iCloud and online marketplace, Ebay. Hodder said, “Traditionally, attacks have been around financial institutions but recently other companies have been targeted.”

Hodder proceeded to tell delegates that even small companies are being targeted for fraud and showed an example of a case study of a small company (40 employees) whose finance director was targeted by criminals via his email address. This scam led to £10,000 in reverse credit card transactions through payment service providers (PSP) and also disrupted the company's IT infrastructure.

Hodder believes that departments should be collaborating more to tackle and resolve fraud risks and that many organisations do not have the technical abilities to keep up with the high volumes of data being produced. According to Hodder, companies within the financial sector should be questioning whether they are working effectively across all silos and if not what can be done to change this.

Hodder also highlighted the ability for big data tools to hone in on issues and problems much quicker than traditional approaches but although it provides many opportunities, Hodder belives that big data also presents serious security challenges. Hodder urged delegates to look internally at data sources and evaluate the quality of the data they currently have. He said that it is important to turn data into intelligence and to use predictive analytics, however before buying solutions from providers companies should make sure they are making the most of existing internal solutions, such as Excel pivot charts.

Alongside using biometric authentication in the future, Hodder believes that “we are going to evolve to a digital passport solution.”

 

By Nicole Miskelly, bobsguide Lead Journalist

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