News flash – The robots aren’t coming; they’re already here and ripping off banks. Armed with millions of personal information records – including passwords, social security numbers, account numbers and addresses – bots can perpetrate account takeover fraud (ATO) in fractions of seconds when compared to manual ATO.
Today, thousands of botnets – connected servers of scripted software robots – can perform what used to require hundreds of hours of manual work in just a few seconds. The results are staggering: both inside and outside the financial services industry, more than 200 enterprise-sized companies reported that it costs an average of $175,000 per year to protect against botnet attacks.
Telltale signs of a coordinated account takeover can include changes to email addresses, phone numbers and mailing addresses. Taken one at a time, it is nearly impossible to decipher trends and detect fraud. But banks can counter-attack with automation and beat the robots at their own game.
What can banks do to strengthen their defenses? The solution is two-fold: educating consumers about password hygiene and ensuring banks are using fresh, consortium-sourced data to identify risky patterns of customer transactions, both monetary and non-monetary. Predictive patterns and real-time data discerned from millions of transactions can uncover otherwise hidden patterns of fraud.
It sounds like science fiction, but with the right data and predictive analytics, the rule of law can prevail against the robot armies. Read Adam Elliott’s perspective this month at Banking Exchange and beware the bot invasion!