Wed, 27 January 2021
Episode 140 – Finding Fraudsters at the Front Door - Robert Capps, NuData Security - Payments on Fire® Risk Series
In a crisp explanation of account takeover and authentication risks, George and Robert Capps, Vice President, Market Innovation, at NuData Security. They discuss the findings of a recent NuData report and its experience with the sophistication of online fraudsters. NuData’s techniques are all about foiling cybercriminals as they bang at the front door of financial institutions, merchants, streaming services, and more.
Payments on Fire® listeners know that we’ve been taking a steady look at fraud issues over the past few years. Fraudsters have been pouncing on every opportunity, taking advantage of pandemic relief payments as well as the shift from card present to card not present, remote commerce transactions. If this topic didn’t matter, we wouldn’t be talking about it.
Measuring and detecting what the fraudsters are up to and their impact is critical. To better understand what’s going on, we speak with Robert Capps, Vice President, Market Innovation, at NuData Security, a company that specializes in behavioral biometrics.
NuData published in Q3/2020 its e report on cybersecurity trends. And the findings are really interesting.
What They Found
The current scourge is account takeover. ATO is a concern for financial institutions, for retailers, streaming media companies, and more.
Attack method sophistication goes well beyond reuse of stolen user IDs and brute force password guessing.
It is an arms race of increasingly complex and sophisticated attack and detection techniques.
NuData and others have expertise in behavioral analytics, tools that detect, among other things, bots that are build to emulate human interactions at the account login page. The use of CAPTCHA is one technique to deter these attacks. But the fraudsters have responded, going so far as to establish call center-scale operations with staff endlessly filling in CAPTCHA forms to add the human touch and smarts in what are otherwise highly automated ATO attacks. This is human farming to get around CAPTCHA and other rudimentary defenses.
Financial institutions and retailers aren’t the only targets. In this age of stay at home orders, streaming services have become targets of opportunity. Parasitic use of streaming service accounts has risen as the fraudsters sell streaming service account credentials.
The Defender’s Balancing Act
There are dedicated professionals working on both sides. But the defenders have the harder job. Besides having to protect every door and window, they also have to keep it simple for good users to transact. Adding friction to a transaction flow increases the shopping cart abandonment rate. That’s bad for the ecommerce merchant and insults the customer. It’s a tough balancing act.
Part of that balance is handled by “step up” authentication based on the level of risk. A bank might let a session proceed to a balance inquiry without asking for further customer input. But if a new payee is added to the account, the bank might insist on sending a one time code to the customer via email or SMS.
Getting to Good ASAP
Providers of authentication services see activity from a lot of devices. Building profiles based on these devices and the many variables surrounding each transaction, they use the profiles to efficiently track the behavior of each in order to separate the known good profile from the questionable.
A technique to “get to good” faster is to pool that profiling information in anonymized form from across all of the clients who agree to participate.
Robert discusses the shifts in fraud given the pandemic. As a percentage of transactions, fraud increased substantially in the travel segment. And for those retailers operating in the physical world the shift to e-commerce was sometimes overwhelming. That’s a story we’ve heard a lot at Glenbrook. Check out our COVID Series book.
Tue, 12 January 2021
Take a listen as George and Deluxe’s President and CEO Barry McCarthy discuss how the company continues to adapt to and prosper in the digital age. Barry talks about the journey the company has taken, in recent times shifting from a conglomerate model grown via acquisition to today’s streamlined and focused small business focused organization.
The Journey from Paper to Digital Services
In Glenbrook’s Payments Boot Camps® we make the point that fintechs rarely invent new functions out of whole cloth. What they do excel at is reimagining and reengineering the processes that incumbent players have been locked into for years.
It’s the incumbent’s inability to adapt that puts them at a competitive disadvantage.
As Charles Darwin put it:
We make this point in our training. Incumbent firms, no matter what the industry, survive and succeed over decades only if they have the ability to adapt to change in their environment. You only have to glance at the moves Visa and Mastercard have made over the last five years - the acquisitions of Plaid and Vocalink (among many) come to mind - and it’s obvious adaptation is at the core of their respective strategies.
In this episode, we speak with a company that has over 100 years of adaptation behind it. Starting with the invention of the checkbook a century ago Deluxe Corporation has expanded and adapted its offerings to the digital needs of its customers.
Take a listen as George and Deluxe’s President and CEO Barry McCarthy discuss how the company continues to adapt to and prosper in the digital age. Barry talks about the journey the company has taken, in recent times shifting from a conglomerate model growing by acquisition to today’s more streamlined and focused organization.