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Banks to increase their use of behavioural analytics: report

Aite Group has published a new report, “Digital Channel Fraud Mitigation: The Mobile Force Awakens,” which details the latest threats to banks and their customers, as well as banking security technologies such as biometric authentication, according to a report by IT Security Guru.

Authored by Julie Conroy, the 39-page report is based on recent interviews with 26 fraud executives from 19 North American financial institutions that have more than US$50 billion in assets.

The report finds that more than half of the banks using knowledge-based authentication technology expect that they will decrease their use of the technology over the next two years.

Meanwhile, six of the banks that were interviewed said they will introduce biometrics for mobile banking login by the end of 2015, said the report.

Multiple methods of behavioural analytics are seeing strong growth, with most banks currently implementing at least one solution and many banks developing or piloting a second solution, according to the report.

Seventy-nine percent of banks said they anticipate increase investment in online and mobile fraud mitigation technology spending over next two years.

Meanwhile, 20% of financial institution executives who are facing flat budgets have expressed their frustration, stating that “race cars don’t have good brakes because they go fast, they go fast because they have good brakes.”
The report finds that when continuous behavioural analysis is combined with compiled behavioural biometric data, they deliver greater intelligence than previously available without negatively impacting the user’s experience.

“While this technology is sometimes classified as biometrics, it is not subject to the same onerous laws as traditional biometrics, therefore Aite Group categorises them as a form of behavioural analytics,” Aite Group research director Julie Conroy writes in the report. “Leading vendors in this arena include NuData Security. When the biometric is paired with strong device authentication, it is even more difficult to defeat. Many biometric solutions also include liveliness checks, to ensure it’s a human being on the other end.”

Using continuous behavioural analysis and compiled behavioral biometric data, NuData Security’s NuDetect online fraud engine is able to predict fraud up to 15 days before a fraud attempt is made.

This early detection provides organizations with sufficient time to monitor, understand and prevent fraudulent transactions from occurring.

“With continuous behavioural analysis paired with enhanced Device ID and biometric analysis, NuDetect offers a combination of layers in one solution unmatched in the fraud detection space,” said Michel Giasson, CEO of NuData Security. “Organizations gain the ability to identify suspicious activity while tracking and analysing behavioral biometrics helps us understand how a user truly acts – and in turn, helps us verify good users from bad ones.

“As Aite outlined, identifying and baselining good customer behaviour, then identifying deviations from this, is a point of emphasis for executives looking to advancing their behavioural analytic capabilities.”

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