Rippleshot Blog

As if issuers didn’t have enough to worry about as they combat rising card fraud rates, the dark web market continues to be a haven for hackers to scoop up droves of credit card data — which is then used to commit even more fraud.

From advanced techniques, bots that make online fraudulent purchases to hacking payment systems, the packaging and auctioning of compromised cards across the dark web to commit and monetize card fraud occurs faster than a bank can detect a compromise, identify compromise cards, reissue the cards and call the cardholders. This has created endless troubles for banks and credit unions looking to stop fraud in its tracks.

Financial institutions are continuing down their digitization transformation by investing in innovative technology. The problem? This opens the floodgates for more touch points for hackers to breach. Another problem? Those fraudsters are more sophisticated than ever. Banks are using new tools to fight fraud— machine learning, automation, cloud technology, etc. —  but so are the fraudsters.

It's a bit of a Catch 22 that exists within the card fraud ecosystem.

“Technology begets technology.”

That’s one of the key takeaways from the 2017 Tech Trend Report from Future Today Institute. As newer technologies emerge into the marketplace, it creates space for more innovation (AKA: more technological advancements).

As the report highlights, there is a seismic shift in how automated technology solutions are changing the face of virtually every industry — payments and financial services included. With concepts like artificial intelligence (AI), machine learning, bots, Internet of Things (IoT) and big data carving a path for the next wave of innovation, the year 2017 and beyond is ripe for the adoption of new fraud fighting technologies.

There’s a new trend in the ATM fraud space. Not only is ATM fraud skyrocketing in recent years, fraudsters are getting smarter, faster and more effective. Today, fraudsters are targeting high balance accounts and withdrawing large sums in a short time span.

The latest data from FICO showed card skimming losses rose 70% between 2015 and 2016. That’s on top of the 546% increase seen in 2015. As for how 2017’s figures will shape up? We’ll have to wait and see. But based on the attention both in the mainstream media and within the financial services ecosystem on this subject, the problem appears as though it will get worse before it gets better.

There’s no silver-bullet solution to tackling the rise of ATM fraud, but there are technologies that can help mitigate the spread of fraud to lessen its impact. 

When it comes to data breaches, not everyone learns from their mistakes. This is the case for some retailers who’ve found out the hard way how easy it is for their systems to be breached not just once, but multiple times.

A new study, “2017 Thales Data Threat Report, Retail Edition,” from Thales e-Security and analyst firm 451 Research, indicates that (of those surveyed), 52 percent experienced a data breach, with 19 percent experiencing a breach in the past year; 11 percent saw more than one breach.

“These distressing breach rates serve as stark proof that data on any system can be attacked and compromised,” said Garrett Bekker, principal analyst for information security at 451 Research. “Unfortunately, organizations keep spending on the same security solutions that worked for them in the past, but aren’t necessarily the most effective at stopping modern breaches.”

Globally and within the U.S., data breaches are a rapidly-growing concern across many industries. A new study indicates 2017’s figures (just halfway through the year) are trending above the total number of breaches seen in all of 2016.

The study, conducted by cyber analytics firm Risk Based Security, reviewed data breaches on a global scale and indicated that between Jan. 1 and June 30 of this year, there have been at least 2,227 breaches. That figure is only including breaches that were publicly disclosed — suggesting the actual data breach figure is far above what this study recorded.

“It is stunning to see the steady increase in the number of breaches impacting one million or more records. In the first six months of 2013, 2014 and 2015, the number of these large breaches hovered in the mid-teens. Last year we saw that number jump to 28, and now, for the first six months of this year, we’re tracking 50 such incidents,” said Risk Based Security Executive Vice President Inga Goddijn.

Based on the number of data breach reports in the news, it should be no surprise breaches in the U.S is on the rise. What is noteworthy, however, is the rate of which these breaches are occurring.

New data from the Identity Theft Resource Center (ITRC) and CyberScout indicates as of June 30, 2017, the U.S. has seen a record high of 791 breaches — a 29 percent increase from 2016’s same timeframe. Based on this pace, the ITRC projects breaches to hit 1,500 this year alone. Overall, that’s a 37 percent annual increase from 2016’s figure of 1,093 breaches (another all-time high).

"Because breaches have become ubiquitous, it is incumbent upon organizations that suffer a compromise to be candid and provide as much information as possible, so that consumers will have the best opportunity to mitigate their personal consequences,” said Adam Levin, Chairman of CyberScout.

As explored in a post last month, we detailed the fallout suffered by companies that experienced data breaches. The conclusion? The scope is expansive and has a long-term impact on brand value and customer trust.

A new study takes that theory to the next level. Comparitech.com, a site that offers security and privacy advice, conducted a study of 24 companies that have experienced a data breach — comparing what happened to their stock after the breach.

The result? Over time, the companies felt the sting, which was reflected in the stock market.

FinTech advancements have transformed the banking industry in the past decade faster than ever before. Paving that path has been the ability of banks and credit unions to tackle one of their biggest problems (fraud) through one key trend: Machine learning.

What's made that all possible? Software and options to integrate smarter, better fraud detection tools. 

While most of the chatter around how artificial intelligence (AI) will impact how banks and credit unions interact with their customers (i.e. chatbots) in the near future, there’s a lot more powerful ways organizations can leverage machine learning to actually impact their bottom line.

Data breaches are expensive for banks, merchants, and consumers, but just how costly are they? A new report from Ponemon Institute breaks down today’s security landscape in its new ‘Cost of Data Breach Study’. We pulled out some of the highlights and interesting facts below.

Let’s start with the good news…The study shows the global average cost of a data breach is $3.62 million – down 10% compared to previous years. The not so good news? The average size of the data breach, according to this research, increased 1.8%.

The cost of a breach is dependent on many factors, including location. There were significant increases in the cost for organizations in the Middle East, United States and Japan, while organizations in Germany, France, Australia and the UK reduced costs associated with responding to and remediating the breach.  

Artificial intelligence has secured its spot in the FinTech ecosystem — making machine learning the chief AI advancement for companies to watch, particularly as it relates to cybersecurity and fraud mitigation efforts for financial institutions.

Need more proof? Just follow the money.

Companies are spending capital hand over fist on researching, developing, and implementing AI and machine learning technology. In 2016, $5 billion in venture capital investments went toward machine learning alone, and corporate investment in AI overall is predicted to triple in 2017. Not keeping up? Now may be the time to invest in machine learning tech. 

“How confident are you in your company’s or client’s ability to respond to a cyberattack? What threats are keeping you up at night, and are you prepared to handle them if they strike?”

These are the types of questions addressed by Advisen and Experian in their recently released 2017 Cyber Risk Preparedness and Response Survey. The research includes responses from 307 risk managers, insurance brokers, and legal experts. The end result: a well-organized collection of valuable insights into the evolving cybersecurity landscape.  

The fallout suffered by companies that experience data breaches is expansive, but one of the largest areas of impact is customer trust. Brand value is greatly lowered in the event of a security breach — even when decisive action is taken to shut down the fraudulent activity and minimize the damage as quickly as possible. And while brand value can be difficult to quantify, several studies have revealed the effects of data breaches on consumer trust — a key indicator of a brand's strength.

At the end of April, US Payments Forum released its "Spring 2017 Market Watch Snapshot." The Forum is a cross-industry body created to address issues that require broad cooperation across the payments industry, including the introduction of EMV chip technology and other payment technologies in the U.S. Their report's top three topics of focus included merchant EMV chip adoption, clarifying CNP fraud status, and increasing focus on transit payments.

Here's a peek into US Payment Forum's recently released key insights on the subjects.

While cybersecurity insurance is newer to the loss mitigation scene than, say, home or auto insurance, it's quickly becoming another must-have for major business. This need has been underscored by the highly publicized data breaches of Home Depot and Target. Article after article examining the circumstances surrounding these cyber thefts and their resolutions appeared in headlines for years after the breaches were contained.