The BBA is now integrated into UK Finance. Please go to www.ukfinance.org.uk for new content and updates from UK Finance.
Material published by BBA prior to 1st July 2017 is still available on this website.
From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
Written by Matt Peachey, VP & GM EMEA, Pindrop
Pindrop’s recent State of Fraud report highlighted the extent of fraud in the UK. It found that one in 700 calls to UK financial institutions are fraudulent which, when calculated against the average number of calls to a large call centre, costs an average of over £20 million every year. The value of this fraud is staggering but what is more frightening is that this is only part of the picture.
The hidden cost of fraud needs to be taken into account too. The impact this has on the customer experience can be far reaching, particularly if call centres are unable to quickly sort fraudulent from legitimate callers. Agents spend longer establishing identity before they are able to offer any assistance, which in turn can end up making genuine customers feel like criminals.
Here are three ways that fraudsters are impeding on the customer experience and subsequently impacting on the hidden cost of fraud:
1. Duping call centre agents
Most businesses have been focusing on improving their cyber defences as attacks online grow more sophisticated. These breaches are continually hitting the headlines causing organisations to rethink their defence strategy against fraud. But in doing so, businesses need to recognise their most vulnerable channel – the phone.
Fraudsters are typically professional social engineers and experts at manipulating people. When speaking to a call centre representative, whose objective is to rightfully prioritise being helpful and dealing with customers in a timely manner, a criminal knows that identifying and handling suspicious calls is not a core competency for that representative. Criminals are taking advantage of call centre workers eagerness to please customers and using this as a way to attack businesses.
2. Fraudster ability to pass KBAs
To help counter this, call centres do provide their reps with a number of personal questions, known as knowledge-based authentication (KBA) to help figure out if a caller is fraudulent. But, this is a limited approach and one that fraudsters can easily bypass. If they can provide that basic information, the ability to move funds is practically unrestricted.
These details are becoming increasingly easy to access via the dark web or through social media and leaves organisations exposed to two things: the risk of transferring funds to a criminal in an attempt to deliver on a great customer experience; or alternatively, treating a genuine customer like a fraudster and impacting on their customer experience. It’s Catch 22.
3. The use of voice alerting technology
We’ve seen a number of mainstream banks look at ways to strengthen their phone defences by implementing voice recognition technology. This step to combat fraud must be welcomed by the industry, but it’s important to note that voice biometrics alone will not be enough to counter the growing fraudulent threat.
Fraudsters have many techniques which help them bypass this level of security. Distortive or synthesised noises for example can alter the sound of a voice, making it hard to verify and accurately define calls as fraudulent. For example, when analysing calls, we’ve put together a list of known fraudsters that regularly target call centres and coupled them with techniques that are making them successful. The one we’ve nicknamed “Distorted-please” relies heavily of voice-distortion technology, demonstrating the additional challenge call centre reps are facing.
Instead of relying on just one form of verification, businesses combating fraud across all channels need to ensure they have multiple layers of defence. Phoneprinting™ technology can identify specific components about each call, such as the location a call is coming from, the device, whether it’s a mobile or landline and whether the phone has been used to call the company before. Combined, this can aid in detecting fraudulent activity before it becomes an issue and help ensure the customer experience remains high.
This quick and confident action needs to happen now. The right authentication and fraud detection must be in place to circumvent attempts by fraudsters to dupe businesses across all their channels. It’s time to act smart about fraud and make sure all bases are covered to finally remain steps ahead, reduce financial losses and maintain customer trust.