In a move aimed at combating ATM and POS fraud, Security
Identity Systems (SIS), a US company specialising in identity theft
protection, is to offer card issuers mobile phone location
technology as an extra layer of security. The service will be the
subject of a pilot programme in the second quarter of 2008,
followed by a planned large-scale deployment in the fourth
quarter.
For its proposed service, SIS has teamed up with mConfirm, an
Israeli developer of authentication technology. The mConfirm system
to be deployed uses two factors – location-based behaviour analysis
and mobile phone location analysis – to develop a fraud risk
score.
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“mConfirm turns any mobile phone into a front-line defence in
the war against identity fraud,” said SIS CEO Bryan Ansley.
“There’s never been a faster or more accurate way to put the brakes
on credit and debit card fraudsters.”
Specifically, when a customer’s payment card is swiped, the
transaction is intercepted at the bank by mConfirm, the card
terminal’s location co-ordinates are extracted and mConfirm logs in
to the consumer’s wireless phone network and compares the current
location of the consumer’s mobile phone to that of the card
terminal. Their proximity generates a rating. The farther apart
they are, the higher the rating, indicating that the transaction is
at higher risk for fraud.
Simultaneously, mConfirm analyses the consumer’s transaction
history, including merchants patronised, amounts spent, dates and
times and locations. The system compares the transaction to the
consumer’s buying pattern. This comparison is rated, with
differences creating a higher rating, and thus signalling higher
fraud risk.
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By GlobalDataThe two ratings are combined to create a risk score that is based
on a scale of one to 1,000, with 1,000 representing the highest
probability of fraud. If the score falls within a predetermined
high risk zone, the bank blocks the transaction. According to SIS,
the statistical probability of a legitimate transaction scoring in
the high risk zone is zero, thus virtually eliminating the
possibility of fraudulent transactions occurring on protected
accounts.
“Our technology will ferret out fraud that a bank’s existing
security measures miss and will eliminate around 90 percent of the
false alerts banks now generate with their existing security
systems,” said Ansley.
mConfirm is currently concluding a pilot project in conjunction
with Visa CAL, an Israeli credit card company with over 1 million
card holders. “Results have exceeded expectations, pointing to
unparalleled fraud-reducing capabilities,” said mConfirm in a
recent statement.
To implement the mConfirm system, banks install software on
their server and administration terminals where risk management
staff monitor and respond to alerts. According to SIS, software
installation and staff training takes about two weeks.
