Banks turn to biometric authentication for ATO prevention, should add behavioral

Banks are increasingly adopting biometric authentication methods, such as facial and fingerprint recognition, to secure customer accounts against Account Takeover (ATO) attacks. According to a new Liminal white paper, these traditional biometrics are favored for their convenience and perceived security benefits, as research suggests biometric authentication is the most prevalent authentication method for preventing ATO within the banking sector.

Account takeover fraud occurs when a cybercriminal gains unauthorized access to a victim’s account, often using stolen credentials or personal information. This type of fraud has become more prevalent due to the increasing reliance on digital banking services and the widespread availability of stolen data on the dark web.

In Brazil alone, a new report released reveals that most digital banking fraud in the region now occurs on mobile devices. According to BioCatch data, a significant number of these devices appear to have been stolen just before the fraud takes place. In addition to stolen devices, BioCatch points to malware and social engineering scams, particularly those involving bank impersonations, as the most common types of fraud affecting Brazil in 2024. These fraudulent activities are estimated to cause around $500 million in losses annually, and in cases where the real customer is making the payment, identity verification with face biometrics does not protect those making the payments.

The Liminal report emphasizes that ATO attacks not only cause immediate financial damage but also erode customer trust and can lead to long-term reputational harm for the targeted organizations.

It names 24 top vendors for bank ATO prevention, including BioCatch. Others on the list include Feedzai, Socure, Prove and LexisNexis, Callsign, NeuroID, Ping Identity and Entrust.

Behavioral biometrics as a game-changer in fraud prevention

To counter the rising threat of ATO fraud, financial institutions are increasingly adopting behavioral biometrics as part of their fraud prevention strategies. Behavioral biometrics analyzes unique patterns in user behavior, such as typing speed, mouse movements, and touch pressure, to distinguish legitimate users from fraudsters. Unlike traditional authentication methods, behavioral biometrics provides continuous monitoring and does not rely on static data that can be easily stolen or spoofed.

Liminal’s whitepaper highlights the effectiveness of behavioral biometrics in identifying and preventing ATO fraud in real-time. By analyzing subtle behavioral cues that are difficult for fraudsters to replicate, this technology adds an additional layer of security that enhances traditional identity verification methods .

Traditional biometric systems rely on physical characteristics that, once compromised, cannot be changed. This creates a significant vulnerability, particularly in the face of social engineering-based ATO attacks, which have been increasing in frequency. Attackers exploiting these weaknesses can bypass conventional security measures, leaving banks struggling to fill the gaps in their defenses. Furthermore, traditional biometrics often lack the comprehensive data necessary for effective fraud detection.

Combining forces of advanced technologies

The integration of behavioral biometrics with comprehensive identity management tools represents an advancement in the fight against ATO fraud, according to an Experian blog post. By combining these technologies, banks can create a multi-layered defense system that not only detects but also anticipates fraudulent behavior.

The report notes that the key to effective ATO prevention lies in the integration of these technologies into a bank’s existing security infrastructure. This requires collaboration between various departments, including IT, risk management, and customer service, for complete coverage. The report mentions that 96 percent of those surveyed are worried about balancing ATO prevention with privacy laws, as banks look for ATO prevention offerings from third party vendors that leverage biometric signals and address scam attack threats.

“When it comes to ATO prevention, banks are prioritizing highly accurate solutions that minimize fraud losses and limit financial loss, while reducing customer abandonment through a seamless user experience,” says Will Charnley, chief operating officer at Liminal.

“Overall satisfaction is most strongly correlated with scalability. As a leader in this evaluation, Experian not only delivers these capabilities to banks, it also demonstrates an unparalleled ability to meet the market’s growing demand, which is projected to reach $1.5 billion by 2028.”

Experian was also named a leader in the 2024 Link Index for Account Takeover (ATO) Prevention in Banking by Liminal.

Article Topics

banking  |  behavioral biometrics  |  BioCatch  |  Experian  |  financial crime  |  fraud prevention  |  identity management  |  Liminal