May 13, 2009

 

Transactional risk management software provider Actimize has released findings from an independent peer-review survey that looked at mass compromise situations where large amounts of sensitive data is stolen at one time, and ATM/debit card fraud.

 

Actimize, a NICE Systems company, offers financial institutions better insight into customer behaviors to improve risk and compliance.

 

The survey, managed by independent research company Infosurv, polled 113 financial services representatives and uncovered that 45 percent of respondents believe they’ve seen compromised data used in fraud attacks against their institutions.

 

This increase in mass compromise attacks of client card information is hurting the card industry and causing operational costs in call centers to increase, as well as damaging customer confidence in companies. Eighty percent of respondents were in strong agreement that mass compromise events are decreasing consumer confidence in the ATM/debit card channel.

 

The survey also uncovered a rise in fraud claims. Seventy percent of the survey respondents said they saw an increase in fraud claims in 2008 in comparison to 2007 - with 58 percent of those respondents seeing double digit growth.

 

Over 80 percent of respondents also said that they expect ATM/debit card fraud attempts to increase in 2009 over 2008.

"Customer and card data are compromised daily and it is our belief that more and more accounts will end up being exposed," said Amir Orad, EVP and CMO at Actimize.

To combat this risk, Actimize notes the importance of real-time prevention solutions in helping companies to analyze and stop fraudulent transactions in real-time.

Of those financial services representative who took part in the survey, only 26 percent admitted to having the ability to analyze and stop fraudulent transactions.

“Based on this research, too many banks lack sophisticated risk management tools when dealing with mass compromises and end up excessively re-issuing cards - this is not a cost effective or long-term solution,” Orad said.

“These attacks have the potential for extremely high losses to the banking industry, and they will continue. Actimize believes it is vital that financial institutions prepare to counter these threats properly.”

Earlier this year, Actimize was recognized by Datamonitor as being a key anti-financial crime vendor.

According to Datamonitor, Actimize is the "only vendor" out of the 29 they studied that has core-offerings across all AML and anti-fraud areas.