In a crisp explanation of account takeover and authentication risks, George and Robert Capps, Vice President, Market Innovation, at NuData Security. They discuss the findings of a recent NuData report and its experience with the sophistication of online fraudsters. NuData’s techniques are all about foiling cybercriminals as they bang at the front door of financial institutions, merchants, streaming services, and more.
Payments on Fire® listeners know that we’ve been taking a steady look at fraud issues over the past few years. Fraudsters have been pouncing on every opportunity, taking advantage of pandemic relief payments as well as the shift from card present to card not present, remote commerce transactions. If this topic didn’t matter, we wouldn’t be talking about it.
Measuring and detecting what the fraudsters are up to and their impact is critical. To better understand what’s going on, we speak with Robert Capps, Vice President, Market Innovation, at NuData Security, a company that specializes in behavioral biometrics.
NuData published in Q3/2020 its e report on cybersecurity trends. And the findings are really interesting.
What They FoundThe current scourge is account takeover. ATO is a concern for financial institutions, for retailers, streaming media companies, and more.
Attack method sophistication goes well beyond reuse of stolen user IDs and brute force password guessing.
It is an arms race of increasingly complex and sophisticated attack and detection techniques.
NuData and others have expertise in behavioral analytics, tools that detect, among other things, bots that are build to emulate human interactions at the account login page. The use of CAPTCHA is one technique to deter these attacks. But the fraudsters have responded, going so far as to establish call center-scale operations with staff endlessly filling in CAPTCHA forms to add the human touch and smarts in what are otherwise highly automated ATO attacks. This is human farming to get around CAPTCHA and other rudimentary defenses.
Financial institutions and retailers aren’t the only targets. In this age of stay at home orders, streaming services have become targets of opportunity. Parasitic use of streaming service accounts has risen as the fraudsters sell streaming service account credentials.
The Defender’s Balancing ActThere are dedicated professionals working on both sides. But the defenders have the harder job. Besides having to protect every door and window, they also have to keep it simple for good users to transact. Adding friction to a transaction flow increases the shopping cart abandonment rate. That’s bad for the ecommerce merchant and insults the customer. It’s a tough balancing act.
Part of that balance is handled by “step up” authentication based on the level of risk. A bank might let a session proceed to a balance inquiry without asking for further customer input. But if a new payee is added to the account, the bank might insist on sending a one time code to the customer via email or SMS.
Getting to Good ASAPProviders of authentication services see activity from a lot of devices. Building profiles based on these devices and the many variables surrounding each transaction, they use the profiles to efficiently track the behavior of each in order to separate the known good profile from the questionable.
A technique to “get to good” faster is to pool that profiling information in anonymized form from across all of the clients who agree to participate.
COVID ImpactRobert discusses the shifts in fraud given the pandemic. As a percentage of transactions, fraud increased substantially in the travel segment. And for those retailers operating in the physical world the shift to e-commerce was sometimes overwhelming. That’s a story we’ve heard a lot at Glenbrook. Check out our COVID Series book.
Podcast transcript
Episode 119 - The API to Streamline and Secure Account Access - Don Cardinal, GM, Financial Data Exchange
Episode 118 - Third Annual RTP Network Update - TCH's Steve Ledford
Episode 117 - Stop Them at the Front Door Before Giving That Loan - Rivka Gewirtz Little, Socure
Episode 116 - Now More than Ever - Glenbrook Payments Boot Camp® Digital Edition - Russ Jones, Glenbrook Partners
Episode 115 - Finding the Phantoms - Synthetic Identity and the Issuer - Naftali Harris, SentiLink
Episode 114 - How to Orchestrate the Merchant’s Payments Infrastructure - Justin Benson, Spreedly
Episode 113 - SMB Cash Management Meets Lending and Payments - Nan Siler, Kabbage
Episode 112 - What the Mobile Ecosystem Brings to Risk Assessment - Rodger Desai, Payfone
Episode 111 - Managing Ecommerce Fraud - Colin Sims, Forter
Episode 110 - Building Out and On a National Faster Payments System
Episode 109 - Bitcoin SV, a Payments and Data-focused Path in Bitcoin Evolutio - Jimmy Nguyen, Bitcoin Association
Episode 108 - B2B Payments for the Massive Insurance Segment - Jeff Brown, VPay
Episode 107 - The Financial Inclusion Impact of the Digital Wallet in Columbia - Hernando Rubio, CEO, Movii
Episode 106 - Payments Infrastructure for the ISV - Richie Serna, Finix
Episode 105 - The Independent Gateway's Enabling Role - Nick Starai, NMI
Episode 104 - The Complex World of Healthcare Payments - Ian Drysdale, Zelis Payments
Episode 103 - Mining the Dark Web for Early Detection of Fraud - Aamna Zia and David Hetu, Flare Systems
Episode 102 - nexo standards Attacks Point of Sale Complexity - Jacques Soussana, General Secretary
Episode 101 - The U.S. Faster Payments Council - Kim Ford
Episode 100 - Strong Customer Authentication - Russ Jones, Glenbrook Partners
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