By Dr Nikolay D Gaubitch, Head of EMEA Research, Pindrop
What, for you, are the benefits of attending a conference like the ‘Fraud and Financial Crime Europe’ and what can attendees expect to learn from your session?
The greatest benefit is to meet colleagues in the field of fraud and financial crime.
Networking is so important, I believe that one of the greatest weaknesses in combating fraud is that we do not collaborate enough. Fraudsters are extremely good at sharing information on process flaws in organisations and the many ways to exploit these for targeted attacks on a global scale. We have observed through our work that fraudster behavior is extremely similar across the world.
What are the biggest factors that have influenced the rising rates of fraud in the voice channel?
There are four key drivers that have led to increased fraud activity on the phone:
a. The rise of online banking and commerce, which does not require face-to-face interactions, even when performing rather complex transactions. One important aspect here is that online banking is now very well-protected.
b. VoIP & pre-paid SIM cards. These allow free or very low-cost calls and facilitate a sense of anonymity. Prior to this fraudsters and hackers using the phone channel would mostly use public or stolen phones. Today, fraudsters do not need any particular technological strengths to ‘hide’ behind a phone call; disguising their caller ID and changing their voice is easily done with many freely available apps.
c. Weak protection on the phone channel. Phone channel security has been very slow at adapting to the rapidly changing fraud landscape. Security has been mostly provided through Knowledge Based Authentication (KBA) or pre-recorded phrases, both of which are now outdated. Large contact centres typically serve hundreds of customers daily, so it becomes challenging for them to distinguish a repeat-fraudster from a genuine customer without the use of technology.
d. The increased use of social media has led to millions of people exposing their personal data without a second thought. This in particular has rendered KBAs as a redundant security measure.
What are some of the latest tactics and MOs used by criminals?
A trait we see steadily increasing is fraudsters that operate by simultaneously collecting information from the customer posing as an organisation – then using this data to pose as the customer to hack their account at the organisation.
Fraudsters also use social networks to monitor or to select their victims.
How are social engineering tactics impacting customer experience?
Phone fraud is increasing; call centres are faced with a very tough decision.
a. Take the loss and continue to provide a somewhat frictionless customer experience. However the experience takes a hit if/ when the customer is exposed to losses through fraud.
b. Increase the difficulty of the KBAs – this lack of trust treats every customer as a criminal, resulting in a cumbersome and time-consuming identification process.
c. Services provided through the phone channel are reduced to the absolute minimum, typically meaning accounts cannot be accessed and should a customer need assistance they would have to physically go to a branch / store.
In your opinion, how will voice channel security develop over the next five years?
Call centres will embrace technology to provide a more secure and personalized service over the voice channel. We will see several changes in contact center infrastructure, most notably the move to cloud, which will make access to advanced voice security technology much more straightforward.
Another major change will be the use of voice interfaces (e.g. voice assistants) with customers expecting instantaneous, frictionless transactions. This will drive the need and the expectation of real-time voice security that uses very little amounts of speech yet is robust enough to catch speech signals in multiple environments; customers no longer sit in a quiet room at work or in the office to make calls.
The people who are willing to take more risks and adapt will thrive. The path to career progression may be in another market or another industry, but the skills will be as important as ever.