Tactics Continuously Evolving to Combat Account Hacking
In the digital age, account takeover fraud is a growing concern for financial institutions worldwide. Traditional methods of static authentication, such as passwords and PINs, are no longer sufficient to protect against this persistent threat. Enter continuous authentication, a modern approach that offers a more robust, adaptive, and user-friendly defense.
Many financial institutions are unaware of the risk indicators for account takeover because a lot of them constitute normal behaviour. However, continuous authentication methods provide a significant advantage over traditional methods. These innovative solutions collect information about user activity and ensure it is consistent with the verified user, providing real-time, ongoing verification of identity throughout a session rather than just at login.
One of the key benefits of continuous authentication is real-time risk identification and threat mitigation. By monitoring user behaviour or biometrics in real time, suspicious activities or account takeovers can be immediately detected and prevented, reducing financial and reputational damage compared to static methods, which only verify identity once at login.
Continuous authentication also enhances security through the use of biometrics and AI. These methods often leverage factors such as fingerprints, facial recognition, and AI to adapt dynamically to emerging threats and reduce false positives, making it harder for attackers to replicate authentication credentials and improving fraud reduction.
In addition, continuous authentication helps meet Anti-Money Laundering (AML) and Know Your Customer (KYC) standards. By maintaining ongoing verification, it strengthens risk management frameworks and meets regulatory requirements more effectively than traditional KYC processes, which often miss a lot of fraud and money laundering, resulting in significant fines.
Moreover, continuous authentication provides a better customer experience. Unlike static password-based logins, continuous authentication can offer seamless, convenient access without repeated interruptions, improving usability and customer satisfaction while maintaining strong security.
Cost efficiency and scalability are also significant advantages of continuous authentication. Automating identity verification continuously reduces manual oversight and mitigates financial losses from fraud, while AI-powered systems scale effectively as institutions expand their user base.
However, the adoption of continuous authentication has faced resistance from some businesses due to the need for advanced technology and concerns about customer friction. Vendors offering continuous authentication solutions need to educate both consumers and financial institutions about what it entails.
Account takeover fraud is not limited to bank accounts; every type of account is at risk. Taking over an email account can cause significant damage, while taking over a social media account can allow fraudsters to scam the user's friends and colleagues. Banks need to recognise that account takeover is not limited to a single account, and criminals aim to take over as many accounts as possible.
In a notable case, TD Bank was criminally charged for failing to find money laundering, which could have been avoided by implementing perpetual KYC. Perpetual KYC assesses the risk every time a consumer uses the account, using AI-powered tools to vet customers in real time. If the risk level is heightened, it flags the account or the customer for possible review.
If a criminal logs into an account using legitimate (but stolen) login credentials, static authentication would likely validate them as the verified user. However, continuous authentication monitors signs of fraud throughout the process and notes what is different from the verified user's behaviour. If the activity is suspicious, financial institutions might use step-up authentication, which involves asking the user to verify using some other method.
In conclusion, the shift towards continuous authentication offers a promising solution to combat account takeover fraud. By providing real-time risk identification, enhancing security through biometrics and AI, improving compliance with regulatory requirements, offering a better customer experience, and being cost-effective and scalable, continuous authentication is a more robust, adaptive, and user-friendly defense compared to traditional static methods. Financial institutions must embrace this modern approach to safeguard their customers' accounts and maintain their reputation in the digital age.
References: [1] https://www.forbes.com/sites/forbestechcouncil/2021/04/20/continuous-authentication-the-future-of-cybersecurity/?sh=784ae5067779 [2] https://www.techtarget.com/searchsecurity/definition/continuous-authentication [3] https://www.finextra.com/blogposting/21466/continuous-authentication-the-future-of-cybersecurity [4] https://www.information-age.com/continuous-authentication-the-future-of-cybersecurity-123494084/ [5] https://www.finextra.com/newsarticle/31082/td-bank-charged-with-money-laundering-could-continuous-kyc-have-helped-prevent-it
Financial institutions can leverage technology in business to implement continuous authentication, which provides a significant advantage over traditional methods in preventing account takeovers by offering real-time risk identification, seamless user experience, and compliance with Anti-Money Laundering (AML) and Know Your Customer (KYC) standards. This modern approach enhances security through the use of biometrics and AI, thereby reducing financial and reputational damage compared to static methods.
By embracing continuous authentication, banks not only protect business finance but also account takeovers for various types of accounts, including emails and social media, as criminals aim to take over as many accounts as possible in the digital age. Continuous authentication is a more robust, adaptive, and user-friendly defense compared to traditional static methods, ensuring financial institutions maintain their reputation and safeguard customers' accounts effectively.
