Asia’s mobile-first boom changing fraud patterns: Fico

• Card fraud alone will cost APAC financial institutions as much as US$1.8bil
• Online and mobile CNP fraud is a growing cause of concern for Asian banks

 
ASIA’S boom in mobile-first consumers is creating a growing target for online fraud and cybersecurity attacks, according to analytics software company Fico.
 
Criminals who used to focus on ATM (automated teller machine) skimming are turning their attention online in an effort to compromise credit and debit card data.
 
These attacks can be far more lucrative, with more details stolen and a lower chance of getting caught, Fico said in a statement.
 
The demographics suggest that this this will soon become a very big data problem. In the next 15 years, Asia is expected to add another billion Internet users, which comes on top of the 700 million it has today, making it the world’s largest market for online consumers, the company said.
 
The last year alone has seen an average 22% increase in shopping on mobile phones across 13 Asia Pacific markets, according to a 2015 study from Visa.
 
Indonesia, China and Taiwan reported the highest rates of growth for 2015 at 36%, 34% and 28% respectively, Fico said.
 
With these card-not-present (CNP) transactions, the retailer never sees the customer or their physical card, and the cardholder doesn’t enter their PIN (personal identification number).
 
At last year’s Fico Asia Pacific Fraud Forum in Singapore, 94% of attendees said that cases of online or CNP fraud had increased at their organisation.
 
Spotting and finding anomalies in this pool of data requires sophisticated self-learning and adaptive technologies so banks can catch fraud vectors as quickly as criminals exploit them, Fico said.
 
The company is currently testing the geolocation abilities of mobile devices and integrating them with its Falcon Platform, which it claimed protects 2.5 billion payment cards worldwide.
 
By validating whether a consumer’s phone is in the same place where their card is being used, the system can reduce false positives while focusing on the most likely incidents of fraud, Fico said.
 
Banks can also send SMS messages to the consumer’s mobile to validate a transaction in real time.
 
Maintaining trust in shopping from mobile devices will also require a new approach to cybersecurity, Fico said.
 
Data breaches at poorly protected retailers can threaten e-commerce sales. Predictive analytics is needed, rather than signature-based solutions, so that so-called ‘zero-day’ attacks can be identified and controlled, it added.
 
“Digital disruption to financial services may present fraud challenges, but it also presents opportunities for us to stop criminals,” said Fico Asia Pacific president Dan McConaghy.
 
“If consumer payments shift toward a new form of payment, fraudsters will seek out the most vulnerable element – which increasingly means a mobile device.
 
“By investing in an analytics-based solution, lenders can add a powerful tool to their arsenal to stay ahead of new criminal fraud patterns,” he added.
 
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