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 99 - Reducing Chargeback Handling Pain - Rick Lynch, Verifi
Episode 98 - Google Pay Deep Dive with Google's Steve Klebe
Episode 97 - Data Breach Prevention, Investigation, and Remediation - Chris Uriarte, AON Cyber Solutions
Episode 96 - Enterprise Risk, No Time to Relax - Tricia Phillips, Kount
Episode 95 - Hiding Data Jewels in the Tokenization Vault - Alex Pezold, CEO, Tokenex
Episode 94 - Digital Identity and Blockchain Tech - Andre Boysen, SecureKey
Episode 93 - Fitting QR Codes into the Card System - Bastien Latge, EMVCo
Episode 92 - Fintech Leaders Talk Payments - Fintech South Atlanta 2019
Episode 91 - Contactless Magic on a Merchant Smartphone - Maxime de Nanclas, Mobeewave
Episode 90 - PSD2 Enables Fintech Competitors - Myles Stephenson, Modulr
Episode 89 - Growing a Fintech Business for Small Business Cross-border Payments by Outgrowing the Blockchain - Marwan Forzley, Veem
Episode 88 - Digital Marketplaces Go Global - Tomas Likar, Hyperwallet
Episode 87 - On Launching an SMB POS Product Line - Gavin Rosenberg, TSYS
Episode 86 - Fraud Management and the E-Tailer - Rafael Lourenco, ClearSale
Episode 85 - It's Hard to Communicate about Chargebacks - Keith Briscoe, Ethoca
Episode 84 - Diving into the Deep Data Pool - Feedzai's Saurabh Bajaj and Nick Stanchenko
Episode 83 - Settlement Systems in Detail - Carol Coye Benson, Glenbrook
Episode 82 - Restaurant Payments Deep Dive - Tim McKenna, Heartland Payment Systems
Episode 81 - Real Time Payment Network Update - Steve Ledford, TCH
Episode 80 - Talking Tokenization - Glenbrook's Russ Jones
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