The recent 45 million dollar ATM heist by a gang of cyber criminals who hacked their way into a database of prepaid cards to later empty the cash machines around the globe has caught the financial institutions by surprise. The technological sophistication and astounding speed at which the operation was carried out has exposed the technical vulnerabilities in the banking system, which led to the multimillion dollar cybercrime.
Fraud costs the financial industry approximately $80 billion annually. Also, a recent PwC survey has found that cybercrime accounts for a much greater proportion of economic crime in the FS sector than in other industries. In the wake of an unprecedented increase in the number of cyber-scams like phishing for financial data, credit card fraud, viruses and others, financial institutions are now faced with the challenge to implement tighter security controls with a focus on data breaches. The banking industry is also grappling with security lapses that have surfaced due to social media, cloud computing, and smartphones because of the huge amount of personal and confidential data stored on these media. The absence of better data security standards has even led to legal liability for financial institutions and companies being duped in the process. In such a scenario, the recent incident has only underscored the need for stringent security and screening technologies to prevent crimes of this scale in the payment industry.
To tackle such threats and address the problem, institutions are relying heavily on the use of technology in addition to establishing cybercrime and organizational security units. One of the most advocated technologies to prevent fraudulent transactions is the use of Chip-and-PIN cards. Reportedly, the success of the heist relied on the use of mag-stripe technology instead of harder-to-forge plastic smartcards. Chip-and-PIN systems, meanwhile, use smartcards that have embedded microprocessors (or chips) rather than magnetic stripes to store cardholder data. According to experts, it is nearly impossible to clone the chip to match the accounts and similar incursions can be thwarted if the universal standards for Chip-and-PIN cards are followed.
Several companies are even exploring biometric security schemes to ensure enhanced security on the ATMs. The proposed biometric security scheme captures a person’s voice, face, or fingerprint, in addition to a PIN, to authenticate the cardholder or a transaction. Tightening authorization on raising account limits, privileged user monitoring and alerts, real-time monitoring of transactions, and employing a higher level of analytics are some of the other measures the banking industry is adopting to counter network security breaches and fraudulent transactions.
Although the above measures will not address the biggest problem - the emergence of new hackers over the last few years, they can prevent your organization from falling victim to an attack that you could - and should - have prevented. Today, when old-school robberies by masked criminals have given way to high-tech multimillion dollar cybercrime operations, financial organizations are joining hands to augment fraud prevention measures to avert potential crime and help peers to prioritize the steps to safeguard their data networks. Is your organization doing its bit?