According the Ponemon Institute, 80% of financial institutions were oblivious to fraud until after the funds were transferred out of the accounts, and a majority of account holders—57%—were unable to recover the losses.
As a result, 40% of the account holders victimized by fraud moved their banking activities to another institution.
These statistics illustrate how financial institutions are continuously challenged with the costly initiative of staying a step ahead of cybercriminals to protect their customers, as cybercriminals constantly shift their tactics to bypass enhanced security measures. This puts immense pressure on financial institutions to enact stronger fraud prevention methods.
While conventional fraud prevention methods work, they lack the flexibility and convenience to allow customers to quickly detect and respond to suspicious transactions. As a result, financial institutions incur added operational costs and shoulder the liability for preventing fraud. In addition, the timeline to dispute certain types of transactions, such as an ACH debit, is very limited, which can result in financial losses for both the account holder and the financial institution.continue reading »