With initiatives like the Scam-Safe Accord and advanced fraud detection technologies, financial institutions are enhancing their efforts to safeguard customers and prevent large-scale fraud. Here, we outline critical mitigation strategies that banks can adopt to address this growing challenge.
The surge in online banking fraud has compelled Australian banks and regulatory bodies to strengthen their defence mechanisms.
With initiatives like the Scam-Safe Accord and advanced fraud detection technologies, financial institutions are enhancing their efforts to safeguard customers and prevent large-scale fraud.
Here, we outline critical mitigation strategies that banks can adopt to address this growing challenge.
Behavioral Biometrics: A Core Element of Scam-Safe Accord Compliance
The Scam-Safe Accord requires that all new online accounts in Australia include biometric verification by the end of 2024.
This step ensures enhanced identity verification through fingerprint or facial recognition, reducing the risk of fraudulent account creation.
In addition to these physical biometrics, behavioural intelligence platforms offer further security by monitoring user actions, such as keystrokes and touch patterns, to detect anomalies.
As scams grow more sophisticated, this layered approach of physical and behavioural biometrics provides real-time detection, acting as a powerful deterrent against identity theft and authorized push payment (APP) fraud.
The Scam-Safe Accord: A Holistic Approach to Fraud Prevention
Launched by the Australian Banking Association, the Scam-Safe Accord focuses on disrupting fraudulent tactics, detecting scams early, and proactively addressing emerging threats.
Some of the key measures under this initiative include:
- Confirmation of Payee System
Set to launch across Australian banks by 2025, this system ensures payment is made to the correct recipient by flagging mismatches between the entered and actual payee name.
- Enhanced Risk Controls
Banks will introduce alerts for high-risk transactions, such as large transfers or payments to new payees, giving customers more time to verify the transaction’s legitimacy.
- Collaboration with Fraud Networks
By sharing data across networks like the Australian Financial Crimes Exchange (AFCX), banks can freeze and recover funds faster when scams are detected.
Advanced Behavioral Intelligence for Real-Time Detection
Behavioural intelligence tools have become a crucial component of fraud prevention in financial services.
These systems analyze user behaviours such as mouse movements, typing patterns, and session activity to identify deviations from normal interactions.
This allows banks to detect and respond to fraud in real time, even if the transaction appears authorized.
Multi-Layered Security and Real-Time Monitoring
A robust multi-layered security approach is essential for fraud prevention.
This should include:
- Administrative Measures
Training employees to recognize phishing attempts and suspicious activities.
- Physical Controls
Limiting access to sensitive systems.
- Technical Tools
AI-driven fraud detection, firewalls, and anti-malware solutions.
Real-time monitoring also plays a crucial role in flagging unusual account activities, such as out-of-hours access or irregular transactions, signalling potential fraud.
Education and Future Liability in Fraud Prevention
Educating both employees and customers is key.
Regular training on detecting scams, coupled with resources for customers on multi-factor authentication and avoiding phishing attacks, can help reduce fraud risks.
As scams continue to rise, banks may face increased liability for compensating fraud victims, following trends in the UK and Europe.
A shift towards mandatory bank compensation could change the future landscape of fraud prevention in Australia.
