Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
Federal Reserve Web Sites
Other Bank Regulatory Sites
April 16, 2012
Online and mobile banking create many front doors
"The vulnerability is the front door of the bank." I've heard that quote many times over the years. With online banking continuing to grow, and mobile being the latest channel to access bank accounts and services, the bank suddenly has many more "doors" to worry about.
An August 2011 Consumer Trends Survey by Fiserv shows that 79 million households use online banking, and businesses are following suit. With this kind of competitive environment, most banks must offer online or even mobile banking to stay relevant. As banks strive to remain relevant, they must also stay safe.
The Federal Financial Institutions Examination Council (FFIEC) published the timely Supplement to Authentication in an Internet Banking Environment in June 2011 to address electronic banking security. As financial institutions enter the mobile banking world, the FFIEC's guidance helps banks to protect against risk in electronic access channels. NACHA also recently reviewed its existing policies and operating rules to ensure it has similar helpful guidance for financial institutions originating ACH transactions in this increasingly connected environment.
Whether it's FFIEC guidance or NACHA rules, these five sound business practices can go a long way toward safe electronic banking, whether through the Internet or mobile channel.
Customer Awareness and Education is ongoing, and one-time notices are not as effective as repeated messages on specific security concerns. Describe potential threats in language understood by the average consumer and business. Consider requiring business customers to perform risk assessments around online banking access and practices.
Layered Security Programs include the practice of tailoring different security tools to the type of account and activity and establishing appropriate controls over account activities based on typical account use patterns. Stay up to date on new layered security technologies and regulatory requirements.
Effectiveness of Authentication Techniques—not all techniques are equally effective. Use complex device authentication methods. Change those methods as technology changes. And establish challenge questions that have answers not readily available on the Internet or through social media sites. Incorporate "red herring" questions into the challenge questions, and use different challenge questions in different sessions.
Customer Authentication for High-Risk Transactions applies to both consumer and business accounts. Monitor accounts for unusual and out-of-pattern transactions on a regular basis. Establish procedures to do something when out-of-pattern transactions are detected.
Risk Assessments and "know your customer" are basic concepts that apply to both consumer and business banking products. Assess threat and risk-related information regularly. Identify types of changes that trigger additional assessments. "One and done" doesn't keep pace in this fast-moving environment. Review experiences with incidents and learn from them. And develop response teams and playbooks to respond quickly to threats or incidents that require immediate action.
With Internet and now mobile banking growing by leaps and bounds, the vulnerability is no longer just the front door of the bank. Following these sound business practices—and it's hard to argue against them—can help to secure all openings from dangers lurking in cyberspace.
By Mary Kepler, director of the Retail Payments Risk Forum at the Atlanta Fed
TrackBack URL for this entry:
Listed below are links to blogs that reference Online and mobile banking create many front doors:
- Security at the ATM: We Have Some Educating to Do
- Payments Stakeholders: Can't We All Just Work Together?
- Introducing Take On Payments
- Does More Security Mean More Friction in Payments?
- Tackling Fraud with Data
- Phone Scams: Still Calling Around
- Forming a More Perfect Union (for Faster Payments)
- Can Insecurity Keep Us from Faster Payments?
- Top 10 Payments Events in 2014
- Under Pressure: The Fate of the Independent ATM Operators
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- account takeovers
- ATM fraud
- bank supervision
- banks and banking
- card networks
- check fraud
- consumer fraud
- consumer protection
- cross-border wires
- data security
- debit cards
- emerging payments
- financial services
- identity theft
- law enforcement
- mobile banking
- mobile money transfer
- mobile network operator (MNO)
- mobile payments
- money laundering
- money services business (MSB)
- online banking fraud
- payments risk
- payments study
- payments systems
- phone fraud
- remotely created checks
- risk management
- Section 1073
- social networks
- third-party service provider
- trusted service manager
- Unfair and Deceptive Acts and Practices (UDAP)
- wire transfer fraud
- workplace fraud