Online fraud is still a dominant issue in the retail banking sector despite the major decline in losses reported by the Financial Fraud Action UK (FFA). The latest figures suggest the cost against UK institutions was calculated at a substantial £17.1 million for the first half of 2013, even though it represented a decrease of 21 per cent compared to the same period in 2012.
Improved fraud detection and swifter action on phishing sites is reported to have contributed to the significant drop. The FFA statement released in early October said that enhanced processes for intelligence-sharing across the banks, as well as better online security tools and greater awareness amongst consumers had led to a decline in losses. Phishing sites, set up by criminals to trick vulnerable customers into giving away their passwords by convincing them they are communicating with their bank or building society, has also seen a dramatic 87 per cent drop in the numbers of these sites, since the equivalent period in 2012.
These statistics may paint a more positive picture; however the retail banks affected by the continuing online fraud practices are still working hard to tackle the issue. The drive to keep customers and their accounts protected remains as strong as ever, with an increased demand for enhanced security solutions to guard customers against online fraud.
At Accumuli, we have been working with a fortune 500 banking group that has a large retail presence across Europe. The bank had invested heavily in retail online banking fraud prevention systems, including two-factor authentication devices, which were provided to every customer. Despite this proactive action, the bank still faced a significant on-going problem from fraudulent online banking transactions, caused by advanced malware specifically targeting their customers. The malware works by manipulating the online banking web interface displayed to the customer, in order to obtain the required two factor codes and make fraudulent payments.
Unfortunately, this is not an uncommon problem with many financial institutions facing attack from this type of advanced malware. The malware used to launch this breed of attack is widely available to buy from hacking forums and even some social media sites, and the code is continually being changed and enhanced to avoid detection.
In a bid to protect its customers, maintain regulatory compliance and protect its world leading reputation, the bank had built internal fraud systems, using analytical techniques, which meant that customers suspected of being victims of online banking fraud were placed in a protected mode and were proactively supported while the malware was removed.
However, the action was not completely successful as the attacks on the bank continued, and the process of protection became both labour intensive and expensive. The bank also needed to continually adapt to changing fraud patterns, which led to using more complex analytical detection techniques and required extra staff to provision.
The bank identified the need for a system that would enable the automation of the analytical detection process developed in-house and increase the speed of detection and response. The system had to have the capability to be rapidly enhanced to deal with new or evolving online banking threats and complex detection criteria and also deliver a platform that could be extended to provide detection and prevention technologies for other types of transactional fraud.
The result of a market review by the bank led to it selecting SIEM as its preferred solution for delivering an automated fraud detection solution. The approach we took involved using our seven stage EDGE methodology to analyse, design and deliver a comprehensive ArcSight SIEM solution. The detection design included a flexible, extensible framework and implementation technology to allow the bank to rapidly update and refine the detection rules if the threat evolves or if new detection patterns are identified.
The new system was designed to support fraud detection capabilities for more than 13 million online daily banking transactions, as well as infection detection capabilities in excess of 40 million web logs per day.
The banks technical teams from mainframe, networks and retail banking worked alongside the Accumuli SIEM experts, who designed and delivered the automated online banking fraud detection solution, implementing existing bank detection logic. When the implementation was completed, the bank’s fraud analysts were provided with an interface into which fraudulent and suspicious transactions were displayed in near real time. The transactions were accompanied with metadata detailing the detection logic that was matched and a threat score, to allow the analysts to prioritise their work.
The system had a significant impact on detection times, reducing it from 24 hours using the manual process, down to less than ten minutes using ArcSight and the external database interface. Subsequently, this allowed the bank to rapidly begin the process of blocking fraudulent payments or start the recovery process before any money had been extracted from the destination account.
As retail online banks continue the fight against fraud it has become clear that increasingly sophisticated techniques from today’s fraudsters demand more complex solutions to help protect customers. The losses to UK online banks may be on the decline but the issue is still highly prevalent in this sector and needs to be tackled with the right mix of expertise and technology.
Jon Inns, Director of Product Management, Accumuli
Study of 50,000+ UK banking app reviews reveals customer ‘frictions’ among prominent retail banks
o Login and user authentication: Nearly a third (30%) of digital banking app customers had issues with logging into the app through their devices, and 1 in 5 (20%) cited problems with username and password or passcode authentication
o Customer service:
§ Nearly a quarter (24%) of customers felt like they were waiting too long for customer support
§ Over 1 in 5 (22%) were unhappy with the customer resolution
§ Over 1 in 10 (16%) customers cited that the support over chat was unavailable or not useful
o Notifications: Almost a quarter (24%) cited that the wrong operation – or none at all – was performed when they clicked on the notification icon. 23% didn’t receive notifications for payments while 1 in 5 (20%) received too many notifications
Today Mobiquity, a full-service digital transformation enabler, launches a ‘Friction Report to benchmark UK & NL mobile banking apps,’ identifying ‘frictions’ within the UK digital banking app customer experience.
The study of 50,000+ UK customer banking app reviews within the Google Play Store and the App store shows the main ‘frictions’ across prominent UK retail banks.
One of the key issues was with login and password authentication. Nearly a third (30%) of digital banking app customers had issues logging into the app through their devices and 1 in 5 (20%) cited problems with username and password or password authentication.
Another ‘friction’ was customer service; nearly a quarter (24%) of users felt like they were waiting too long for customer support.
Almost a quarter (24%) cited problems with notifications. Either the wrong operation was performed, or no operation was performed at all when they clicked on the notification icon. 23% didn’t receive notifications for payments while 1 in 5 (20%) received too many notifications.
Meanwhile, over 1 in 5 (22%) were unhappy with the customer resolution, and over 1 in 10 (16%) customers cited that the support over chat was unavailable or not useful.
Commenting on the report, Matthew Williamson, Vice President of Global Financial Services, Mobiquity said: “As the use of digital payments increases during the pandemic, so has mobile banking usage. The launch of Mobiquity’s Banking Friction Report helps banks to identify the ‘business frictions’ in their mobile banking experience to help align with evolving customer expectations.”
“An interesting observation that can be made is that most of the banking apps in the Google Play and App store score highly, but when you only account for reviews where people actually leave comments regarding an app feature, i.e. feature ratings, scores are quite low. This can be attributed to users no longer having to proactively go to the Google Play or App store to rate an app, but now are prompted to review an app while they are using it.”
“Nowadays, banks cannot risk treating their customers as passive observers, building products and features that do not take their feedback into consideration. Looping customer feedback into the decision-making process is key as banks get real-time information regarding which aspect of the app customers value the most, and where they find the most friction while interacting with the app.”
The future of offshore banking
By Granville Turner, Director at Turner Little.
Despite its misconceptions, the popularity of offshore banking is growing. Not only is it a perfectly legal way of holding your money, but with the right professional advice, it is also reassuringly simple to open an account.
This ease-of-use is prompting many offshore banks to change their offering to compete and make overseas banking even more accessible. No longer is it limited to just the super-rich.
So, what does the future look like for offshore banks? We’ve compiled a list of the top fundamental changes happening in the realm of offshore banking.
Catering to niche markets is the future
Rather than managing account holder’s money in general, offshore banks are tapping into how they can best serve different demographics. Essentially, it is about taking a more bespoke approach to managing money at various stages of life.
But catering to a variety of markets doesn’t just stop there. Many overseas banks are now accepting crypto as a form of currency to appeal to digital, tech-savvy generations.
Cryptocurrency is also attractive for those who see the security benefits it can offer.
Paper chains are fast becoming a thing of the past
As banks move away from paper in favour of digital, security is on everyone’s minds. This is because information is an important asset to many businesses, so protecting it is vital. As such, banks are securing data with the most vigorous encryption security standards.
For account holders, this means digital bank transfers and communication become less of a risk and the smarter thing to do. Paper chains are fast becoming a thing of the past.
Instant access, day or night
In today’s digital world, you don’t need to travel overseas to open an offshore bank account; everything can be done online or over the phone. And like most UK standard current accounts, many offshore accounts now offer online and mobile banking features. So account holders can manage their offshore finances and investments while transferring funds with ease.
Offshore banks are following the same route of challenging onshore banks by going branchless. This offers substantial benefits for account holders, as branchless offshore banks don’t pass on as much overhead costs to the customer. Ultimately, this means customers can earn better interest rates and other returns on their investments.
Happy to help
At Turner Little, we work closely with offshore banks to provide you with quality service tailored to your needs. With over 20 years of international banking experience and specialist expert knowledge, we will assist you with your enquiries, no matter how complex. And every account we arrange comes with internet banking, card facilities and the ability to transact internationally.
Hong Kong’s First Multi-Cloud Challenger Bank Goes Live with Temenos
- WeLab Bank designed, built and launched using cloud-native Temenos Transact in less than 10 months
- WeLab offers next generational digital services for the 7.5m people in Hong Kong to access from their mobile phones
- Customers can open accounts remotely in just 5 minutes with bank reporting 10,000 account openings within 10 days of launch
Temenos (SIX: TEMN), the banking software company, today announced that WeLab Bank, Hong Kong’s first homegrown virtual bank, has publicly launched using cloud-native Temenos Transact to provide a range of next generation digital services for customers to enjoy 24/7 from their mobile phones. Designed, built and launched in less than 10 months, the fully digital bank has seen rapid take up with a reported 10,000 account openings within the first 10 days of launch.
WeLab Bank is powered by cloud agnostic Temenos Transact for core banking along with Temenos Analytics and Financial Crime Mitigation. Implemented on Amazon Web Services and Google Cloud, WeLab is the first multi cloud digital bank in Hong Kong. Operating on multiple clouds at the same time gives WeLab increased operational resilience and disaster recovery capability and is a regulatory requirement of the Hong Kong Monetary Authority for new digital banks. According to the Economist Intelligence Unit 2020 report for Temenos, 81% of global banking executives surveyed believe a multi-cloud strategy will become a regulatory prerequisite.
Developing a cost-effective and scalable core banking solution was paramount for WeLab. Temenos cloud native software is built for the digital age using API-first and DevOps principles and engineered to deploy in containers and microservices. This makes it easy for WeLab to scale for future business growth efficiently and eliminates the need to provision for peak processing volumes so that the bank only pays for its actual usage, yielding significant cost savings.
Critically, with NuoDB the solution delivers a cloud-agnostic, distributed relational database that enables WeLab to deploy an active-active on-demand database across multiple cloud providers with near zero downtime failover.
Temenos Transact is a preconfigured system and so requires very little coding and with Temenos model bank to address local practices and regulations, WeLab was able to bring its service to market faster and extend its innovation with more than 400 out-of-the-box APIs.
With Temenos, WeLab bank is set to transform banking in Hong Kong. In as fast as 5 minutes, customers can remotely open a WeLab Bank account with $0 monthly fees and start enjoying differentiated services such as time deposits with competitive rates, an interest-bearing deposit account with an instant virtual Debit Card, and real-time payments powered by Faster Payment System (FPS). Everything can be done on a mobile phone, simply and effortlessly.
Adrian Tse, CEO at WeLab Bank, commented: “WeLab Bank was born from an initiative to reimagine the banking experience for the 7.5 million people of Hong Kong. From the start, we knew this vision needed the most advanced cloud native technology and a partner that shared our vision for digital transformation. With Temenos we have efficiently built WeLab Bank from scratch, free from any legacies, with innovative features that proactively help customers to take control of their money and their financial journey.”
Max Chuard, Chief Executive Officer, Temenos, said: “Congratulations to WeLab Bank on the launch of their trailblazing new digital bank. Building and launching a licensed bank in such a rapid timeframe is a fantastic achievement and we are proud to have supported them in becoming the first multi-cloud digital bank in Hong Kong. Temenos cloud-native, cloud-agnostic strategy means we can satisfy the needs of the most innovative and ambitious neobanks like WeLab Bank to run on multiple cloud providers. We know this is just the beginning for WeLab and we are excited to be part of their story as they revolutionize banking for people in Hong Kong.”
Bob Walmsley, CEO of NuoDB said: “We are excited to be partnering with Temenos to help WeLab Bank achieve their aggressive launch timelines and deliver innovative banking services to its customers. We were inspired by the technical vision of WeLab and knew that executing an on-demand, multi-cloud strategy was a perfect fit for NuoDB. Our enterprise-class, distributed SQL database combined with Temenos’ cloud-native technology helps banks of all sizes around the globe migrate to the cloud to improve agility and reduce costs.”
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