Countering Cross-Channel Fraud Threats

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Countering Cross-Channel Fraud Threats

  1. 1. Countering Cross-Channel Fraud ThreatsDena Hamilton BAI Payments Connect March 11, 2013 — 11:00 a.m.-11:30 a.m. 1
  2. 2. Countering Cross-Channel Fraud ThreatsDetica’s - 2013 Top Three U.S. Fraud and Compliance Trends• Enhanced focus on the fraudster footprint Fraudsters were accountable for significant financial losses in 2012, as many firms overlooked key fraudster behavior and risk characteristics until it was too late. Institutions will need to carefully and consistently investigate and better understand the fraudster to better protect against financial crime in 2013 – reviewing history, patterns and other characteristics to provide investigators with more well rounded insight and create a clear view of relationships in the networks in which the fraudsters operate.• ACH and wire fraud remain favorite tools for organized criminals With FI’s seen as easy prey, 2013 will see an increased exploitation of ACH and wire fraud by organized criminal rings. Firms will need to invest more to develop their defenses and implement anomaly detection to combat both anticipated and unexpected attacks.• Mobile fraud matures Mobile fraud will finally come into its own in 2013, as criminals leverage past source-code and tested techniques to develop more resilient malware and gain access to high level data stored on mobile devices. FI’s will be challenged to protect mobile data as the number of transactions and volume of data on smart phones grows© BAE Systems Detica 2013 Company Confidential 2
  3. 3. Cross-Channel Fraud DefinitionFederal Reserve Presentation 2009Cross-Channel Fraud — “Theft from deposit accounts by way of multiple points of access — whether branch, automated teller machine, call center, debit card, online banking, ACH or wire.” - Dan Tobin, IT Examiner Supervision, Regulation and Credit Federal Reserve Bank of Boston© BAE Systems Detica 2013 Company Confidential 3
  4. 4. These Threats Are Pervasive and Relentless© BAE Systems Detica 2013 Company Confidential 4
  5. 5. Why This Topic and What’s New? Global Evolution of Emergence of New Payment Existing Payments Players and Mechanisms© BAE Systems Detica 2013 Company Confidential 5
  6. 6. Why This Topic and What’s New? The Rise of Mobile In the U.S.© BAE Systems Detica 2013 Company Confidential 6
  7. 7. Why This Topic and What’s New? The Rise of Mobile© BAE Systems Detica 2013 Company Confidential 7
  8. 8. Why This Topic and What’s New? The Rise of Mobile© BAE Systems Detica 2013 Company Confidential 8
  9. 9. Why This Topic and What’s New? 2012 Payments Fraud Survey Summary of Results — September 2012Source: Payments Information and Outreach Office — Federal Reserve Bank of Minneapolis© BAE Systems Detica 2013 Company Confidential 9
  10. 10. Why This Topic and What’s New?Source: Payments Information and Outreach Office — Federal Reserve Bank of Minneapolis© BAE Systems Detica 2013 Company Confidential 10
  11. 11. Why This Topic and What’s New?Source: Payments Information and Outreach Office — Federal Reserve Bank of Minneapolis© BAE Systems Detica 2013 Company Confidential 11
  12. 12. Why This Topic and What’s New?• The faces of fraud are changing and evolving. Organizations are familiar with the traditional forms of fraud with checks and payment cards, but over the past year many different fraud events have made the headlines: • ATM skimming sprees • Multiple retail chain breaches • Social networking sites infiltrated • Fraudsters swapping out POS pin pad units at a favorite arts and craft retailer • ACH and wire fraud with business banking clients • Many targeted phishing schemes• Because of the increase in these access points as well as the innovation of new electronic payment methods, criminals and their attacks are becoming much more sophisticated© BAE Systems Detica 2013 Company Confidential 12
  13. 13. Regardless of the SourceIn the 2012 AFP Payments Fraud and Control Survey • Introduction and Key Findings: “As payment options proliferate, so, too, do new twists on fraudster’s schemes and techniques. Checks continue to lead as the payment type most attached, even as their use dramatically declines. But as paper gives way to plastic, Internet and mobile payments accelerate, and the globalization of business continues to grow, the need for new security models becomes ever more important” - Stephen W. Markwell, Product Executive of Treasury Services, J.P. Morgan© BAE Systems Detica 2013 Company Confidential 13
  14. 14. Why This Topic?• Financial Crime Survey 2012 — Operational Risk and Regulation in conjunction with Detica NetReveal®: • The outlook for continued investment in financial crime detection and prevention remains positive for 2013, with anticipated annual growth well ahead of the previous On average, 83% of respondents expect an increase in their financial crime and compliance budgets (compared to 42% in both 2011 and 2010), of which a staggering 56% predict an increase of more than 20% (compared to 14% in both 2011 and 2010).© BAE Systems Detica 2013 Company Confidential 14
  15. 15. Mitigating Residual Risks• In the current climate of advanced persistent threats, data breaches and malware-infected end-points, it is not surprising that information security stands out as a serious concern that warrants more attention© BAE Systems Detica 2013 Company Confidential 15
  16. 16. Countering Cross-Channel FraudWhy so hard to catch? • Multiple interactions with distinct touch-points • Forensics typically focuses on the point of the breach, not the interactions leading up to it • When accessed only for exploration, the online channel typically doesn’t record activity© BAE Systems Detica 2013 Company Confidential 16
  17. 17. Countering Cross-Channel FraudWhy is the risk growing? • Payments products are increasingly using multiple channels • Emerging payments products are being adopted by financial institutions • The increasing role of third-party processors • Operational, information security and legal/compliance risks may not be fully understood • Growing complexity of systems© BAE Systems Detica 2013 Company Confidential 17
  18. 18. Detica’s Financial and Cyber Crimes Intelligence Platforms© BAE Systems Detica 2013 Company Confidential 18
  19. 19. Securing a Connected World A full suite of products and services to protect institutions INSIDE, AT, and OUTSIDE THE PERIMETERINSIDE THE PERIMETER• Fraud Detection/Management• AML/Compliance• Cyber Monitoring and Detection (CyberReveal)• Cyber Response and Remediation• Communications Monitoring INSIDE ATAT THE PERIMETER• Penetration Testing• Secure Network Guard (SNG) OUTSIDEOUTSIDE THE PERIMETER• Threat Intelligence• Cyber Defense Strategies and Consulting© BAE Systems Detica 2013 Company Confidential 19
  20. 20. Offers Depth of Defense ENTITY ANALYTICS DETECTION SCENARIOS • Single view of entities • Out of the box scenarios — • Applies analytics to create combines rules and analytics electronic fingerprints / profiles • Risk Scores • Holistic, cross-channel • Ability to incorporate external approach ENTITY DETECTION models and behavioral scores ANALYTICS SCENARIOS SOCIAL ALERT AND NETWORK CASE ANALYTICS MANAGEMENT SOCIAL NETWORK ALERT AND CASE ANALYTICS MANAGEMENT • Relational approach of entities • 360° view of client • Detect collusive behavior and • Single technology platform hidden relationships • Alert Triage and Optimization EXPERTISE • Industry risk, fraud and compliance SMEs • Highly regarded graduate program • In-house data labs© BAE Systems Detica 2013 Company Confidential
  21. 21. Detica Recommendations• Single platform approach — risk, fraud, and compliance• Integrated command and control KPIs and risk indicators• Full solution suite — across every stage of the customer journey from initiation through to remediation• Full 360° view of the customer• Unprecedented, perceptive approach to detection and prevention• Predefined social network analytics• Customer-centric analytics and profiling• Watch list management• Enterprise case management• Compliance reporting capabilities• Real time and batch, proven detection and prevention industry models© BAE Systems Detica 2013 Company Confidential 21
  22. 22. Contact DetailsIf you have any questions or would like to find out more about DeticaNetReveal® please contact: North America Head Office BAE Systems Detica 265 Franklin Street Boston Dena Hamilton MA 02110 USA Tel: +1 (617) 737 4170 Dena.Hamilton@BAESystemsDetica.com Fax: +1 (617) 737 4190 International Offices Australia Belgium Canada Dubai France Germany Ireland India Poland Singapore Spain The Netherlands UKnetreveal@detica.comwww.deticanetreveal.com © BAE Systems plc 2013. All Rights Reserved. BAE SYSTEMS, DETICA, NETREVEAL, Detica NetReveal are trademarks of BAE Systems plc. Detica Limited is a BAE Systems company registered in England and Wales under number 1337451. Its registered office is at Surrey Research Park, Guildford, England, GU2 7YP© BAE Systems Detica 2013 Company Confidential 22
  23. 23. References and ResourcesDetica • Knowledge Center — https://www.deticanetreveal.com/en/knowledge-centre.html • 2013 Trends — https://www.deticanetreveal.com/en/knowledge-centre/news/item/bae-systems-detica-forecasts- top-us-fraud-and-compliance-trends-for-2013.html • Cross Channel Fraud — https://www.deticanetreveal.com/en/knowledge-centre/financial-services-collateral- en/general.html?task=weblink.go&id=119AFP • 2012 Survey: Key Results — http://www.afponline.org/pub/pdf/2012_AFP_Payments_Fraud_and_Control_Survey-- Introduction_and_Key_Results.pdfGoogle • Mobile Trends — http://www.thinkwithgoogle.com/insights/library/studies/our-mobile-planet-us/ • Mobile Banking Trends — http://www.thinkwithgoogle.com/insights/library/studies/mobile-banking-trends-2012/Federal Reserve • Payment Fraud Survey — http://www.minneapolisfed.org/about/whatwedo/payments/2012-payments-fraud- survey-consolidated-results.pdf© BAE Systems Detica 2013 Company Confidential 23

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