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Build Security, Build Customer Loyalty

By: Michael Scheibach

In our world of multichannel banking, including mobile payments and mobile check deposit, consumers and businesses alike are increasingly concerned about security, and rightfully so.

Guardian Analytics just released its 2012 Business Banking Trust Study of 1,000 small to mid-sized businesses and found that nearly 75 percent of respondents have experienced online fraud; More than 50 percent have been hit in the past 12 months. The 2012 Identify Fraud Report: Social and Mobile Forming the New Fraud Frontier, released earlier this year by Javelin Strategy & Research, reported that identity fraud increased by 13 percent last year, with more than 11.6 million adults becoming victims of identity fraud in the United States.

Although the banking industry is responding to security concerns, these numbers clearly show that fraud remains a major — and escalating — threat to banks and their customers.

“In 52 percent of the cases, the small to medium-sized businesses in our survey indicated that it would take only one fraud incident, whether successful or not, for them to lose confidence in their financial institutions’ ability to protect their assets,” said Terry Austin, CEO and president of Guardian Analytics. In an interview with BankInfoSecurity, Austin went on to say that financial institutions “have a lot to lose, starting with the financial loss from fraud itself, but also lost time, tarnished reputations and, ultimately, the loss of customers if they don’t solve this problem and get it right.”

The problem is actually a set of diverse problems encompassing identity theft, security breaches, malware, kiting, duplicate presentment, corporate account takeover and wire fraud, to name a few. Fraudsters are not restricted in their efforts to attack a financial institution’s security — or its customers’ security. Fortunately, however, security solutions are now available that address all these areas. Here are a few examples:

CompleteID from ID Insight ( is a next-generation identity verification solution for someone opening an account or changing information in an account. It involves a three-step process: verifying personal information; utilizing access-point intelligence technology for confirming an address, as well as any crimes or fraud activity associated with the specific address; and scoring based on the verification and access-point information.

Using ExpectID from IDology (, an SaaS technology solution, a financial institution can integrate a verification solution into its website or online platform through IDology’s application programming interface, deploy the solution in its call center using IDology’s real-time Web portal and even deliver authentication questions to a mobile device.

ACH Alert ( is an automatic alert system that warns subscribing account holders when an ACH debit transaction occurs, thereby allowing them to control the pay/no pay decision for incoming ACH debits. The system provides clients with real-time, transaction-level protection for commercial and individual customers; simplified identification of trusted trading partners and valid payment recipients; and facilitation of electronic transaction disputes between the financial institution and their client.

Identity Stronghold ( offers financial institutions a way to promote their brands while helping customers. The company’s Secure Sleeve, which can be imprinted with the institution’s name or promotional message, protects credit cards containing radio frequency ID chips, or RFIDs, from being skimmed by fraudsters.

These companies represent a growing list that provide authentication and security products to the banking industry. As technology advances, however, and as more consumers and businesses use online and mobile banking, so, too, will fraudulent activities advance. The key is to approach security not as a project with a definitive timeline but as an ongoing process.

Michael Scheibach is executive editor of BankNews.

Copyright (c) October 2012 by BankNews Media