The author of this article is Bahaa Abdul Hussein. As a Fintech expert, Bahaa Abdul Hussein always shares his experience on various platforms. This time he talks about how banks can leverage fintech to better protect their customers.
It is true that using a mobile phone or a PC to perform banking transactions is convenient and fast. After all, customers do not have to stand in long queues at the banks to withdraw or deposit their funds.
The United States-based Security-org conducted research that found one-third of log-in attempts in financial services organizations were suspected login attempts with an intention to steal customer funds.
Increase in account takeover fraud
Attempts for account takeover fraud typically starts with a hacker using compromised user credentials, which have been found on the web or stolen. They might also get these credentials via phishing attacks called credential stuffing. As several customers share and reuse their passwords, the chances of account takeover frauds are shooting up drastically.
A cybercriminal frequently initiates the process by introducing minor alterations to the account. It usually entails to making changes in the password. It means the actual user will not have any access to his/her account any longer.
The hacker performs unauthorized financial transactions, such as fund transfers. It continues until the user detects such abnormal activity or when there is no fund in their bank accounts.
Continuous malicious activities
On several occasions, a hacker who has got access to the bank account of a customer uses the latter’s personal details to go a step further. They may use the same tactic for other accounts at different banks where the users have used the same login credentials to access their accounts.
These criminals may also use the compromised personal details for creating fresh fraudulent accounts using the information of their victims.
Expenses for financial institutions
The effect of an account takeover causes difficult issues for customers. However, even financial institutions and banks face problems. They have to bear direst costs for helping other financial institutions and other partners or victims linked to the account of the victims.
There may be a loss of CLV or Customer Lifetime Value. That happens if their customer/the latter’s family members and friends shift their accounts in other financial institutions after experiencing such frauds.
Multi-Factor Authentication can assist to avert account takeover fraud
MFA or Multi-factor authentication offers an extra security layer to financial institutions and banks to stop hackers from utilizing stolen user credentials for accessing customer accounts.
The fact is OWASP or Open Web Application Security Project regards MFA as the only primary control for reducing the threat of credential frauds.
The article has been published by the editorial board of the Fintek Diary and is authored by Bahaa Abdul Hussein. Happy Reading. For more information please visit www.fintekdiary.com
