2013 Banking Identity Safety Scorecard: Changing Tactics In The Face Of Growing Account Takeover And New Account Fraud
Javelin Strategy & Research, March 2013, Pages: 66
In 2012, account takeover and new-account fraud each rose by approximately 50% over the previous year. These two fraud types impact consumers most severely, and they are historically more difficult for FIs to prevent and detect than any other major fraud type. Javelin’s Eighth Annual Banking Identity Safety Scorecard evaluated the top 25 FIs by deposit size based on their consumer-facing security features.
FIs were scored according to Javelin’s Protection, Detection, and Resolution Model. Javelin updates its criteria and scoring system each year to reflect top industry standards and fraud trends emerging from consumer data and secondary research.
The purpose of this report is to assess the performance of individual FIs and the industry as a whole in staying ahead of fraudsters in a constantly evolving threat environment. In accordance with guidelines put forth by the FFIEC in its “Supplement to Authentication in an Internet Banking Environment,” Javelin tested the degree to which FIs are implementing compensating controls as part of their layered authentication systems. Javelin also placed special emphasis this year on solutions that empower consumers to fight fraud by giving them input into the process of blocking and flagging suspicious transactions.
To this end, great strides were made this year in the area of user-defined limits and prohibitions (UDLAPs), which rose from 0% to 40% since 2011. The availability of review and release alerts and two-way actionable alerts, however, remains disconcertingly scarce, being offered by 24% and 16% of FIs, respectively.
Primary Questions
- What is the state of the current threat environment?
- Which fraud solutions are best adapted to mitigating current threats?
- Which FIs are best positioned to prevent, detect, and resolve today’s biggest fraud?
- Which practices have been commonly adopted by FIs, and which should be adopted?
- Are FIs appropriately layering authentication solutions for compensating controls?
- How have FIs changed their consumer-facing practices since 2011?
Overview
Primary Questions
Methodology
Survey
Scorecard
Cluster Analysis
Criteria Updated
Executive Summary
2013 Scorecard Winners
Major Findings
Prevention, Detection, and Resolution Model
Recommendations
Environment
Regulatory Guidance: Today and Tomorrow
Consumer Fraud Trends
The Digital Threat Ecosystem
Advanced Authentication Technologies
Overall Fi Performance
Prevention
FI Performance in Prevention
FFIEC Guidance and Authentication Criteria Updates
Partnerships Are Key for Detecting More Evasive Fraud Types
Alerts
Resolution
FI Performance in Resolution
Resolving Account Takeover and New-Account Fraud
24/7 Account Suspension
Identity Theft Insurance or Guarantee
Next-Day Availability of Stolen or Compromised Funds, Temporary Credit
Zero-Liability Policies
Appendix
Glossary
Related Research
Table of Figures
Figure 1: Top 25 FIs by Deposit Size
Figure 2: Scorecard of Possible Points, Average Score, and Percent of Points, 2013
Figure 3: NEED TITLE
Figure 4: New-Account Fraud Incidence and Total Fraud Amount by Year
Figure 5: Account Takeover Fraud Incidence and Total Fraud Amount by Year
Figure 6: Fraud Incidence by Data Breach Victims, Non-Data-Breach Victims, and All Fraud Victims
Figure 7: Geolocation Users’, Mobile Bankers’ and All Consumers’ Perceptions of the Effectiveness and Ease of Use of Geolocation
Figure 8: Overall Banking Identity Safety Scores, 2013
Figure 9: Prevention Scores, 2013
Figure 10: Percent of FIs Using Authentication Solutions
Figure 11: Graphic Representation of Authentication Cluster Analysis Results
Figure 12: Percent of Top 25 FIs Prohibiting the Use of SSN as an Authenticator
Figure 13: Percent of Victims Whose SSN Was Stolen, by Fraud Type
Figure 14: Percent of FIs Linked to or Recommending Security Software, 2011 and 2013
Figure 15: Percent of FIs Using Mobile Security Features
Figure 16: Percent of Consumers Who Perceive Online Activities as ‘Risky’ or ‘Very Risky’
Figure 17: Percent of FIs With Educational Information on Website
Figure 18: Percent of FIs Offering User-Defined Limits and Prohibitions, 2011 and 2013
Figure 19: Detection Scores, 2013
Figure 20: Means of Detection by Fraud Type
Figure 21: Percent of FIs Offering Credit Monitoring, Personal Information Monitoring, and Credit Report Services, 2011 and 2013
Figure 22: Percent of FIs With Detection Capabilities
Figure 23: Percent of FIs With Mobile Alert Capabilities
Figure 24: Percent of FIs Offering Account-Related Alerts
Figure 25: Percent of FIs Offering Personal-Information-Change-Related Alerts
Figure 26: NEED TITLE
Figure 27: Percent of Victims Who Have Resolved Their Fraud by Fraud Type, 2011 and 2012
Figure 28: Percent of FIs Reviewed With Various Resolution Criteria
Figure 29: Percent of FIs Reviewed That Offer Zero-Liability Coverage for a Variety of Transaction Types
Figure 30: Prevention Scores, 2013
Figure 31: Prevention Scores, 2013 (Continued)
Figure 32: Prevention Scores, 2013 (Continued)
Figure 33: Detection Scores,
Figure 34: Detection Scores, 2013 (Continued)
Figure 35: Detection Scores, 2013 (Continued)
Figure 36: Resolution Scores, 2013
Figure 37: Resolution Scores, 2013 (Continued)
Figure 38: Resolution Scores, 2013 (Continued)
Figure 39: Fraud Incidence by Fraud Type and Type of PII Compromised in a Data Breach, 2012
Figure 40: Percent of Online Bankers Currently Using Antivirus, End-User Browser Protection
Figure 41: Misuse to Detection Time by Fraud Type
Figure 42: Results of Cluster Analysis Model
Using Packages of Similar Solutions Leaves Security Holes
Prohibiting the SSN as an Authenticator Could Stop up to 48% of Account Takeovers
FIs Push for Browser Security, Consumers Miss the Message
Security and the Mobile Channel
Education
Udlaps
EMV for Debit
Detection
FI Performance in Detection
- BB&T
- BBVA Compass
- BMO Harris Bank
- Bank of America
- Bank of the West
- Capital One
- Citibank
- Citizens Bank
- Comerica
- Fifth Third
- HSBC
- Huntington
- JPMorgan Chase
- Key Bank
- M&T Bank
- Navy FCU
- PNC Bank
- Regions Bank
- Sovereign
- SunTrust
- TD Bank
- U.S. Bank
- Union Bank
- Wells Fargo
- Zions Bank
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