Technology has brought countless positives to this world, let's not pretend otherwise. However, for every new advancement there is often a challenge that comes hand in hand. There is perhaps no better example than the technological innovations that have come to the banking sector - in particular, online banking. All over the world, online banking fraud is on the rise and the costs are really quite staggering.
Online banking crime of this type occurs when the fraudster gains access to, and transfers funds from, a victim's online bank account. In some cases, an individual may be tricked by a criminal into making a fraudulent money transfer themselves. A variety of factors are believed to have contributed to the increase in online banking fraud, but it has been driven by a change in attack methods with criminals using social engineering scams such as phishing in combination with more sophisticated online attacks such as infecting computers with malicious software in order to facilitate the crime.
The loss in personal finances are one thing, and indeed the cost across Europe sits at a massive €21.2bn a year. However, the cost not factored in here is the loss in productivity twinned with the potentially huge damage to reputation and customer confidence. It’s not possible to place a definitive figure on these losses and many cases of fraud go undetected and undocumented as a result, however - the industry is facing a real challenge here.
Tech innovations are an arms race in any industry, but banking could be considered to be on the front line in this metaphor. The desire to constantly innovate and be seen to be ‘the first’ means that adoption of new products, new distribution channels and digital transformation within the organisation run the risk of being adopted before security measures are in place to combat the inherent risk of a new technology. The question is how to unify these security measures in what are a series of disparate transaction systems.
It’s no easy task, but the industry must look towards the very forefront of tech innovation to address this problem. Already we’re seeing the far-reaching potential of biometric authentication enabled through mobile technology in Apple and Android Pay - could we take this further?