Mike Nathan SAS Online Payment Banking Fraud A world of opportunity or a perilous journey?
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Mike Nathan
SAS
Online Payment Banking Fraud
A world of opportunity or a perilous journey?
Can business analytics strengthen Online Banking fraud detection?
Money mules - who owns the problem?
Why businesses are shifting their focus to Online Banking Fraud?
Organisations are faced with tough challenges to focus on reducing losses AND ensure a smooth customer journey AND take effective, timely action.
Potential projected global fraud losses related to occupational fraud are more than $3.5 trillion USD.
ACFE 2012 Report to the Nations
“Cyberthieves have cost US companies and their banks more than $15 billion in the past five years, the FDIC found in a recent study.”
Financial Times, 2012
Estimated global financial crime IT spending will grow to $4.3 billion USD by 2013.
Chartis Research
Online Banking Fraud increases by 71% in the first 6 months 2014
UK Payments
Tough challenges for organisations
Today’s frauds are
Increasingly sophisticated
Higher velocity/faster
Cross industry
Multi channel
Advanced technologies
Social with pressures on staff
Siloed by line of business - No sharing of data
Act on event or customer
Rules and predictive models alone have limitations
Few proactive steps taken to combat cross channel fraud
Evidence insufficient to act upon
Investigation time consuming
Current fraud systems
are not good at finding
fraudsters:
Today’s schemes are
Online Banking Fraud is when fraudster has illegally
accessed a customer’s online banking system to
misappropriate funds
Would make a terrible heist movie!
Real Fraud
REAL FRAUD
How to rob a bank
The perfect heist requires:
• Advanced safe cracking
• Mountain climbing
• Kung Fu
• Computer hacking
• CCTV hacking … Or …
The perfect heist…
Or…
Go fishing…Go f(ph)ishing…
… or….
… and definitely….
Get to know someone who has a job at the bank
Get to know someone who has a job at the bank
Recruit some money mules…
… or….
Recruit some money mules…
An open-box solution covering all areas
Point of Compromise
Anomalous behaviourChange of details
Saving account drainingScore incoming transactions
Point of Exit
New beneficiariesVelocity Rules
Session data rules
Customer Level
Mule account scoringVictim propensity scoring
Watch-list accountsBehavioural scoring
Social Network Analysis
Points of vulnerability for online fraud
Points of vulnerability for online fraud
Fixing FraudHow to detect Money Mules
Fixing Fraud How to detect staff behaving badly
Avivah Litan, VP Gartner
"Security and fraud risk exposure is increasing as organizations are
threatened at multiple points of vulnerability.
Companies are re-evaluating how they tackle security since a
fragmented approach is consistently leaving organizations at greater
risk of attack. A more holistic approach to security ensures all layers
of protection function together.“
Money Mule Detection 3 step programme
Step 1
Train your staff to spot the signs of mule account behaviour
Step 2
Improve Application Fraud Systems to help identify money mules before they can open accounts
Step 3
Identify data sources and utilise analytics to enable you to distinguish Mule account behaviour.
Hybrid Analytics
Network
Entity
Event
Money mules - who owns the problem?
An issue with money mules is that it is often perceived as another bank’s issue.
Fraudsters realize this, exploiting it by committing fraud in one bank and withdrawing at another.
There is little incentive to prevent the fraud, both banks accuse each other of failing to control their mule problem
Mules = Application fraud...
Questions & Answers
For further information
WWW.SAS.COM
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