Body Armor


Ensure layered security with biometric technology

By Deborah Peace

A commonly shared perception in the world of cybersecurity is that two types of organizations exist: ones that have been breached and ones that will be. In the wake of numerous severe and highly publicized data breaches, it seems as if this statement could be true. In fact, according to results from the 2016 Association of Financial Professionals Payments Fraud and Control Survey, 73 percent of companies were targets of payment fraud in 2015.

With evolving cybersecurity threats and growing regulatory pressures, banks are constantly challenged to enhance their security measures, and although the industry deems cybersecurity essential, the aforementioned statistic highlights the problems with current approaches to fraud prevention and security. Banks have long relied on features such as firewalls, security tokens and one-time password technology to protect their customers, but these measures can be breached with malware.

To protect customers from today’s increasingly sophisticated cybercriminals, banks must use new technology to enact stronger authentication methods and ensure layered security. Given the capabilities of today’s technology and the prevalence of digital devices, banks should be leveraging biometric technology in conjunction with out-of-band authentication to allow their customers to quickly respond to and prevent fraud.

Customers empowered to detect and respond to suspicious activity gain more control over their accounts while the bank can monitor where funds are being directed and who is pulling the funds from the account, based on the customer’s guidance. To do this, each outgoing credit should be compared to a list of preapproved payees, which are identified by the routing and account number combination. If a new routing and account number are presented, the transaction is automatically suspended until the customer reviews the activity. Then, during the review process, banks can leverage voice biometric technology to allow the customer to verify the transaction or stop a fraudulent transaction. This process can take place before the funds even leave the customer’s account.

If anomalous activity is detected, an out-of-band alert can be sent to the customer, along with a one-time authorization code. Upon receipt of the alert, the customer then dials the number for an interactive voice response system. Once the system starts recording, the customer enters the one-time authorization code and then repeats a random phrase to establish voice recognition. Once recognized, the customer can reject or approve the transaction.

By combining several security measures, such as out-of-band alerts, one-time passcodes and biometric technology, banks can ensure a much higher level of protection for their customers and differentiate their services from that of their competitors. Empowering the customer to quickly and conveniently respond to fraud before the funds leave their account also can provide banks with a valuable opportunity to generate fee-based revenue while enhancing the customer experience. This is crucial in an increasingly competitive market, because 6 percent of consumers switched banks as a result of security concerns, and 28 percent switched banks after being victims of fraud, according to a study released by Gartner Inc.

Financial institutions are obligated by law and their own self-interest to protect their customers against fraud. By leveraging biometric technology and existing fraud-prevention measures, banks can mitigate the risk of fraud and help their customers keep money where it belongs—in their account. Biometric technology can reliably authenticate an accountholder’s identity, enabling financial institutions to raise the bar on security. And when biometrics are coupled with additional fraud-prevention measures, cybersecurity threats are effectively eliminated.

Deborah Peace ( ) is chief executive officer of ACH Alert in Ooltewah, Tenn., a provider of fraud-detection services.