Decoding 2023's Top Banking Threats - Part 1 - XTN Cognitive Security

Decoding 2023’s Top Banking Threats – Part 1

Get to Know the Risks of Authorized Push Payment Fraud, Payment Fraud and Card Fraud.
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Banks entrusted with safeguarding their customers’ funds are frequently targeted by various forms of digital fraud. These threats present substantial challenges to financial institutions globally, carrying potentially devastating financial and reputational consequences. We have outlined for you the most prevalent and concerning frauds of the year. In this first part, we will specifically look at Authorized Push Payment Fraud, Payment Fraud, and Card Fraud.

Authorized Push Payment Fraud

Authorized Push Payment Fraud, also known as APP Fraud, involves a fraudster convincing an individual to make an authorized but deceptive payment or funds transfer. The recipient of the payment appears legitimate but is, in fact, controlled by the fraudster, who fraudulently receives the funds.

Main Risks for Banks

In an ever-evolving landscape of fraud threats, financial institutions must remain vigilant and proactive in safeguarding their customers’ funds and their own reputations. Today, banks face the significant challenge of being able to distinguish legitimate activities carried out by a genuine user from illicit ones, also carried out by the genuine user but unwittingly guided by the fraudster.

Even though the financial loss is more linked to the end user than to the banking institution, there is still a need to establish a relationship of trust with customers, who must feel protected from this type of attack. Here, it becomes crucial for banks to avoid reputational and brand damage, as well as regulatory and legal consequences that can arise from APP fraud.

Safeguard Your Customers from APP Fraud

The XTN Cognitive Security Platform® provides a comprehensive safety net to recognize and stop Authorized Push Payment Fraud resulting from social engineering scams. By doing so, it saves businesses from the operational costs associated with fraud, as well as the reputational damage that can result from such incidents. By employing a multi-layered analysis approach, XTN’s solution assesses context, identifies risky applications, monitors user behavior for anomalies, and scrutinizes unfamiliar payment transactions, swiftly stopping potential fraud and averting financial loss.

Payment Fraud

Payment fraud is the illegal and unauthorized use of payment methods, such as credit cards, debit cards, bank transfers, and other payment instruments, to wrongfully obtain money or goods or avoid paying for them. This can be achieved through various means, including identity theft, phishing scams, skimming devices, etc.

Main Risks for Banks

Banks struggle with the need to distinguish potentially fraudulent payments in online transactions from the normal activity of a genuine user. This type of fraud exploits techniques such as Man In the Middle/Man in The Browser or, more simply, Identity Theft or Account Takeover. A weak situation occurs, for example, in the case of payments below a certain threshold for which Strong Customer Authentication (SCA) is not normally required.

Payment Fraud poses a triple threat, leading to substantial financial losses that directly impact the institution’s bottom line. Additionally, the associated brand reputation issues can erode customer trust, potentially leading to a loss of clients. Moreover, combating and managing Payment Fraud necessitates allocating substantial resources, resulting in high process management costs.

Protecting Your Bank from Fraud is An Undeniable Imperative!

By implementing XTN’s cutting-edge solution, your bank can maximize Payment Fraud protection while eliminating the hassles of fragmented and separate fraud management. Our comprehensive fraud protection ecosystem offers unmatched omnichannel coverage, monitoring all bank channels simultaneously from a single console. Leveraging XTN’s innovative technology, our Payment Fraud Protection solution covers a wide range of essential analyses, including payment volumes, speed of execution, behavioral anomalies, watchlist evaluations for Indicators of Compromise (IoC), and Indicators of Fraud (IoF), intermediary behavior analysis, and user history correlation. With these robust analytical tools, your bank can effectively combat fraud, proactively identify potential threats, and safeguard your institution’s reputation and financial well-being.

Card Fraud

Card fraud is an inclusive term for fraud committed using a payment card, such as a credit card or debit card. It refers to the unauthorized use of someone else’s card information for fraudulent purposes, occurring when an individual utilizes another person’s card details without their consent. This may involve making unauthorized transactions online, at physical stores, or withdrawing cash from ATMs.

Main Risks for Banks

Financial institutions need to detect any abnormal activity that occurs within a credit or debit card. This is very important because it means extending user activity protection beyond the online banking channel.

There is a certain overlap between card fraud and payment fraud because the danger of this fraud lies not only in the physical use in a store but also in the possibility of stealing card data through a skimming device and using it for online fraud. In this case, it becomes even more important to integrate information between physical and online security and obtain the most comprehensive user profile possible.

Empowering Issuing Banks with Card Fraud Protection

At XTN, we specialize in providing a comprehensive solution to protect issuing banks from card fraud. Our solution leverages real-time fraud protection and user behavior risk analysis to safeguard against fraudulent transactions. By providing REST API integration, we enable banks to receive instant risk score analysis results, allowing them to block suspicious transactions before they are forwarded to card circuits or accept payment. By harnessing these advanced functionalities, we empower our Clients to detect and prevent Card Fraud proactively, ensuring the security of their transactions and safeguarding their customers’ financial well-being.

Banks can no longer afford to rely on partial or in-house security measures. In today’s dynamic threat environment, a comprehensive defense is non-negotiable. XTN provides the cutting-edge solution your institution needs. Don’t settle for less.

Contact us now to revolutionize your approach to banking security.

Stay tuned for Part 2 of this article, coming soon. In the meantime, delve deeper into the topics:

Authorized Push Payment Fraud

Payment Fraud

Card Fraud


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