In our earlier blog, in recognition of International Fraud Awareness Week, we drew attention to the evolving payment fraud landscape facing banks.
As fraudsters become more sophisticated, financial institutions must adopt advanced security measures to protect their customers and assets. This blog delves into four innovative solutions that are making significant strides in combating banking fraud: biometric authentication, dynamic code verification, 3D Secure and EMV tokenisation.
Biometric Authentication
Biometric solutions, such as fingerprint and facial recognition, are used to enhance the security of digital banking and payment services. These biometric methods provide a robust layer of protection by verifying the unique physical characteristics of users, making it significantly harder for fraudsters to gain unauthorised access. By integrating biometric authentication into banking systems, financial institutions can ensure that only legitimate users can perform sensitive transactions, thereby reducing the risk of bank fraud. This not only improves security but also enhances the user experience by offering a seamless and convenient way to authenticate identity.
Just one example of how biometrics in banking is hitting the mainstream is the introduction of biometric bank cards. The contactless limit is frequently being raised – which is great news when you want to make a fast, fuss-free payment. However, this capability can become a problem in the scenario of a card being lost and someone else takes it on a spending spree. Biometric payment cards eliminate this risk and provide a strong safeguard against unauthorised expenditure.
3D Secure
Card Not Present (CNP) fraud is a growing concern, with £200 million lost in the UK in the first half of 2022, accounting for 45% of all financial fraud losses. To combat this, security measures like 3D Secure (3DS) have been introduced, effectively reducing CNP fraud in Europe by limiting the CVV (Card Verification Code) validity in time, as the code generation is now dynamic. For CNP transactions and for regulation compliance, such as PSD2 in Europe, 3D Secure verification is gradually replacing SMS generated One-Time- Passwords.
Dynamic Code Verification
Dynamic Code Verification (DCV) has emerged as a solution to further reduce bank fraud by up to 32%, securing online payments and providing peace of mind for both cardholders and issuers. Unlike the static CVV code, DCV changes over time or usage, making it significantly more secure. If a compromised, outdated code is used, the transaction is immediately identified and declined, rendering fraudulent purchases ineffective.
When combined with 3DS or used standalone, DCV is a powerful tool to mitigate fraud, avoid dispute costs, and handle fraud investigations efficiently. By adopting Thales D1’s DCV, banks can significantly reduce fraud costs and enhance payment security. The Thales D1 platform offers a modular, cloud-based approach with a comprehensive API catalogue, enabling banks to enhance their card issuers’ ecosystem without extensive custom integrations.
EMV Tokenization
Advanced EMV tokenization solutions for eCommerce, enhance the security of online transactions by replacing sensitive card information with a unique identifier, or token. This process ensures that actual card details are never exposed during transactions, significantly reducing the risk of fraud. By using tokens instead of real card numbers, even if the token is intercepted, it cannot be used for unauthorised transactions. This added layer of security helps protect both consumers and merchants from data breaches and fraudulent activities, fostering a safer online shopping environment. Banks can implement EMV tokenization to modernise their payment systems and ensure secure digital commerce. By adopting this technology, banks can proactively protect their customers’ financial information, providing a safer environment for online transactions and enhancing overall trust in their services. Thales’ EMV tokenization is a crucial component in modernising payment systems and ensuring secure digital commerce.
As the threat of bank fraud continues to evolve, banks must stay ahead by implementing cutting-edge security measures. Biometric authentication, dynamic code verification, and EMV tokenisation are powerful tools that can significantly reduce fraud and enhance the security of digital transactions. By adopting these technologies, banks not only protect their customers’ financial information but also build trust and confidence in their services.
