Carrier Data Can Help Mitigate Risk for the Mobile Channel

Posted on June 25 by David Barnhardt via Mitek Systems Blog

A recent survey by revealed that 90 percent of FIs say the benefits of mobile banking far outweigh any risks. This corroborates findings included in the 2013 American Bankers Association Deposit Account Fraud Survey Report that determined 92 percent of FIs attribute no losses whatsoever to remote deposit fraud. However, in that same study, fraud-management executives were asked to identify perceived vulnerabilities and mobile banking topped the list.

I recently joined Early Warning’s Product Development and Management Team after working as a fraud-prevention and risk-management executive in the banking industry for many years. After focusing for such a long time on combating today’s fraud challenges, the opportunity to proactively address some of tomorrow’s threats really appealed to me.

Recently, Mitek invited me to discuss both current and future risk management challenges as part of a recent “best practices” webinar they hosted. During that webinar, I spoke about mobile authentication at the carrier level and – since the webinar – I’ve gotten a lot of questions about it, so I thought I should explain the service in greater detail.

Mobile authentication is a new service that Early Warning is developing for FIs that creates a foundational layer of mobile authentication by answering three fundamental questions.

  1. Is the person using the mobile device who they claim to be? (can the mobile network operator validate that the device is tied to the person’s account?)
  2. Have there been recent changes to the device or to the owner’s account data? (SIM swaps? Ported phone numbers?)
  3. Is the person using the device authorized on behalf of the mobile account?

These are important questions and by leveraging the network–based authentication capabilities of the mobile carriers, Early Warning can answer them.

What does this mean? Up until now, FIs had to rely on traditional, device–centric authentication measures (passwords and answers to cryptic questions, for example). By using the same SIM card–based network data that mobile operators rely on, FIs will be able to quickly verify account logins and financial transactions with a previously-unavailable degree of confidence and convenience. What’s more, negotiating such common disruptions as lost or stolen phones, switching mobile carriers and porting phone numbers will be managed in real-time without inconveniencing your customers.

As a result, FIs will have a streamlined identity validation process that doesn’t create obstacles for customers, but instead introduces a more sophisticated risk management solution (customized to the needs of the mobile channel) that actually enhances the customer experience. It also means FIs can open new accounts and authorize mobile transactions with greater confidence.

This is just the beginning. As the future of mobile banking evolves, Early Warning will continue to leverage and explore the effectiveness of deploying collaborative intelligence, such as carrier information and other relevant data, to reinforce a trusted exchange between consumers and financial entities.

About the Author:
David Barnhardt is Early Warning’s Vice President of Product Management - Deposit/Payment Solutions where he helps develop deposits and payments solutions. He joined Early Warning in 2014 bringing with him thirteen years of executive experience in the bank fraud and risk management. During his career he has done extensive work in mitigating deposit, debit, e-commerce, and internal fraud. He also does significant work in link analysis and collusive ring investigation.

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