Feedzai and BioCatch Reports Show Increase in Fraud and Biometrics Adoption Plans
Two behavioral biometrics vendors separately warn of an increasingly dangerous online fraud environment in financial services and the challenges of resource constraints in dealing with it.
Online fraud attempts in card payments increased 23% between April and June 2021, according to the latest Quarterly Financial Crime Report by Feedzai.
The transition to digital banking and cashless transactions continued in the second year of the pandemic, according to Feedzai. P2P payments increased 146%, cash transactions decreased 44% and online transactions increased 109%, according to the report.
Purchase scams, in which consumers pay for products or services they will never receive, was the top scam of the quarter in volume terms. The report details other common scams, such as smishing, and geographically analyzes fraud rates in the United States.
Feedzai’s tips for preventing online fraud include the use of educational resources provided by banks, which constantly monitor fraud trends and have a vested interest in protecting customer accounts. It is also recommended that you adopt biometrics and two-factor authentication, handle suspicious communications with care, and report them to your financial institution.
Feedzai acquired Revelock just a few months ago to add behavioral biometrics capabilities to its fraud prevention platform.
Many Financial Institutions Plan Adoption of Behavioral Biometrics, BioCatch Says
In recognition of this changing fraud landscape, two in three financial institutions plan to increase their investment in fraud management resources, BioCatch says.
Despite this, the main fraud prevention challenge facing financial institutions is the lack of resources or budget to adopt new tools and technologies. The lack of visibility into the risks introduced by new technologies and the increased friction that can be caused by multi-factor authentication were identified as a major challenge by roughly the same number of respondents as the lack of resources (47 and 46% respectively).
Almost a third (32%) of financial institutions plan to adopt behavioral biometrics within the next 18 months, while 24% plan to adopt physical biometrics such as voice, facial or fingerprint authentication. Thirty-four percent intend to adopt transaction analysis and monitoring.
The results are drawn from a survey of 175 global financial institutions around the world, half of which in North America, conducted in partnership with Information Security Media Group.
“Advanced machine learning and online behavior review will make a difference,” comments Raj Dasgupta, BioCatch’s director of fraud strategy for North America. “Examining behavior during a transaction allows you to leverage all this rich data to gain insight so that you can assess risk. What was not apparent in the past with only personal information-based checks or device-based checks is now fairly evident with behavioral biometrics. “
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