01:31 PM
U.S. Bank Spending On Fraud and Authentication Is Rising
A survey conducted by Gartner shows that bank spending on fraud prevention is increasing in the U. S. Banks expect to spend even more on fraud detection and customer authentication in 2009 than in 2008, and spending generally will be higher among the largest banks.
In March 2008, Gartner surveyed 50 U.S. banks to understand how banks assess security threats across channels and how they deal with fraud customer authentication. Overall, about 60 percent of banks expect to spend more on fraud detection in 2009, a figure that rises to 71 percent among large banks with customer deposits of more than $150 billion.
On a scale of 1 to 7, with 7 being "extremely important" and 1 being "not at all important," compliance with banking regulations scored 6.58 as a driver among respondents, while improving fraud prevention scored 6.26 and increasing consumer confidence scored 6.22. The largest banks surveyed ranked compliance at 6.76, improving fraud prevention at 6.67 and increasing customer confidence at 6.4.
According to the survey, online banking fraud detection is the most widely implemented fraud management system across U.S. banks, followed by stronger consumer authentication at banks' Web sites. Over the next two years, plans for new fraud prevention and customer-security-related projects include stronger caller authentication for customers that telephone call centers.
Avivah Litan, vice president at Gartner, says banks tend to consider their Web channels to be more secure than their phone channels. Nevertheless, most banks say that they will spend more money in 2008 on Web fraud detection than on call center fraud detection, which acknowledges that the Web channel is generally more vulnerable when it comes to outright monetary theft or account surveillance.
The report, Bank Spending on Fraud and Authentication Rises, but Not Due to Red Flag Regulations, is available on Gartner's Website here.