However, to ensure they stay one step ahead of today’s profit-driven fraudsters, banks need to use the most advanced, anti-fraud techniques to prevent criminals from gaining access to legitimate online bank accounts. Michael Grillo’s article, “Combating Online Banking Fraud – A Top 10 List,” provides a checklist of the essential fraud detection methods that all banks should consider to ensure they are doing everything they can to stop online fraud, including:

1. Apply multi-factor logon authentication for online banking systems – such as tokens with one-time password or Adaptive Authentication (risk-based authentication).
2. Utilize real-time analytics – monitor transactional behavior to determine whether activity is standard or anomalous for that customer. When high-risk activity is detected, action can be taken in real time or near-real time to stop the transfer of funds from the customer’s account. Funds can also be held until customer validation can take place (see #4 below).
3. Employ profiling – include non-financial information (IP address, login activities, and device characteristics) to build customer profiles which can be stored to monitor ongoing behavior.
4. Make use of out-of-band notification methods - utilize phone call, text message, e-mail, etc to confirm activity with customers before transactions can be completed.
5. Maintain anti-virus software – Be sure to recommend your customers keep it current on end-user machines. While not fool-proof, it can stop lesser forms of intrusion.
6. Maximize password management – Ensure password management best practices are enacted (e.g. change password every ninety days, minimum length, combination alpha-numeric, varying history, etc.).
7. Leverage dual approval and limit management capabilities in your online banking tool -End-users with transaction initiation or approval entitlements should not also have administrative rights.
8. Implement token management at ACH or Wire release – this approach provides another layer of authentication prior to finalizing the transaction.
9. Employ a prescriptive, layered approach to security – utilize security tools within your online banking solution (e.g. multi-factor authentication, limit management, etc) with a fraud prevention and detection solution (e.g. profiling, analytics, etc.)
10. Education – keep it simple but constant. Partner with your customers to ensure they are aware of today’s threats and know what tools are available today to protect themselves.

As the industry shares information about new types of fraud attacks, iovation’s ReputationManager 360 puts intelligence shared by over 2,000 fraud professionals around the globe to work. By leveraging our knowledge base of 650 million Internet-connected devices and their associations, financial services and other industries can immediately identify suspicious activities through configurable real-time, fraud detection mechanisms that include device identification, device reputation and risk profiling.

In addition to the daily monitoring of transaction anomalies, velocities, geolocation and proxy-busting technology, iovation helps leading online brands stop fraudulent transactions before they are processed, as well as roots out and rids their systems of repeat offenders and fraud rings that are unknowingly perpetrating a multitude of fraud and abuse activities over time.

In the article, “Internet fraud’s U.S. price tag put at $550 million,” Donald Brackman, director of the National White Collar Crime Center (NW3C), said the growing figures can be largely attributed to increasingly sophisticated online schemes and cyber criminals’ ability to hide their true identities online.

“Criminals are continuing to take full advantage of the anonymity afforded them by the Internet. They are also developing increasingly sophisticated means of defrauding unsuspecting consumers.”

FBI special agent, Charles Pavelites, added that another reason the numbers continue to climb year over year is the simple fact that more people are using the Internet than ever, which increases the overall pool of online criminals and potential victims.

Findings like these underscore the ongoing need for individuals and businesses to stay on top of emerging threats, take all necessary precautions around unsolicited emails and Web sites they’re providing personal information or making online payments on, and, of course, make sure they’re using the latest anti-virus software and solutions. The key to evolving cyber crimes is the fact that criminals are taking advantage of the latest technology and techniques to defraud anyone they can. Shouldn’t we be doing the same to protect ourselves?