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Stay ahead of the fraudsters – and the auditors

By the time you finish reading this sentence, a financial institution will have fallen prey to a cyberattack. That means significant fraud losses for the organization.

Criminal organizations are attacking faster and hitting harder than ever before. And financial services institutions—with their complex network of digital touchpoints, 3rd party integrations, and lucrative data—are a prime target for online fraud.

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Fraud Protection for Financial Services

For financial services institutions, keeping gross fraud loss in check isn’t a choice—it’s a business imperative. If you can secure your assets and stay compliant, you’ll get ahead of your competitors. If you can’t, you’ll risk costly regulatory penalties and irreparable damage to your brand and bottom line.

But customer behavior is complex and hard to track. They interact with your institution across a complex set of digital touchpoints that includes web, mobile, and open APIs. Fraudsters know that, and they attack the seams in your defenses. They exploit the traditional defenses between security and fraud teams, using bots to automate and scale, emulating human behavior to bypass defenses, or even manually impersonating your real customers with stolen or synthetic identities.

How can you distinguish between fraudsters and customers without impacting the user experience you’ve worked so hard to deliver?

The New Business Imperative

Learn more about why organizations must adapt to the digital-first world.

THE SECURITY PARADOX

The paradox at the heart of modern risk management strategy is balancing security with usability. Your goal is to use security to protect your customers. But while strict security and fraud controls may stop some attackers, they will impact the experience for all customers.

Security mitigations like CAPTCHA and SMS-based multi-factor authentication (MFA) introduce friction into the customer experience. When customers are unhappy, it leads to decreased revenue, customer dissatisfaction and increased support costs. And ironically, fraudsters can easily bypass these tools.

Relaxing your controls, however, lets attackers through the floodgates, allowing them to commit fraud that results in bottom line losses and a damaged brand. To keep your account holders happy and prevent fraud at the same time, you need a security strategy that’s more effective and less invasive than traditional methods.

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VP of Shape Intelligence Center Dan Woods Demonstrates How to Defeat CAPTCHA

Attackers are Evolving — So Should Security

As more customer interactions move to digital channels, attackers are evolving their tactics to defraud financial institutions. Financial institutions need solutions that continuously adapt so they can parse human intent and behavior from bot activity.

With a plethora of automated tools and compromised data available for purchase on the dark web, security often feels like a lopsided game of chess, where attackers get two moves for every one move aimed at improving protection.

Between 2017 and 2019, the F5 Security Incident Response Team noticed that 41% of all reported incidents in the financial sector were brute force and credential stuffing attacks.

The Rise of Automated Fraud - Credential Stuffing and Account Takeover (ATO)

Financial services institutions are seeing an increase in automated attacks like credential stuffing, which lead to account takeover (ATO) and fraud. Attackers are effective at gaining access to customer accounts by using actively exploited or publicly available compromised credentials, bots, and readily available tools. Armed with AI and automation aimed to bypass your defenses, they are executing credential stuffing attacks on a massive scale.

The growing popularity of fintechs like Zelle, DBS PayLah!, and CoverWallet, which use open APIs, has increased the attack surface for most financial services organizations. Threats against open APIs cannot be mitigated with anti-automation defenses alone. Fintech has also complexified the regulatory and compliance requirements facing financial services organizations.

The Pivot to Manual Fraud – Impersonating Customers

It is not enough to secure logon from automated attacks. All digital interactions must be protected, from account creation to login to transferring money.

Account takeover (ATO) and new account opening fraud are extremely difficult to prevent. Fraudsters adapt their methods to bypass challenges and countermeasures, doing everything from emulating human behavior, to manually interacting with the application, to using click farms, to exhibiting human behavior to evade detection.

Unfortunately, criminal organizations are motivated by significant financial gain. Compromising customer accounts has proven to be a lucrative avenue for fraud such as money laundering. As a result, these types of attacks will probably continue to increase.

THREAT ECOSYSTEM AT-A-GLANCE

It is difficult to mitigate these attacks without compromising customer experience. Traditional access controls like CAPTCHA or Multi-Factor Authentication (MFA) can be bypassed and often introduce friction into a user experience.

While you can never eliminate risk, implementing defenses that make your applications more challenging to compromise will greatly increase the probability that criminal organizations will focus their attention elsewhere.

F5’s Shape Artificial Intelligence bot and fraud protection platform protects over 500 million financial services accounts, 60% of North American consumer banking, including at 9 of the top 15 US banks.

PROTECTION YOU CAN BANK ON

You shouldn’t have to choose between delighting your customers and eliminating friction from the user experience.

By protecting the world’s most valuable brands, F5 has unmatched visibility into automated and human traffic. Coupled with machine learning algorithms trained by attack profile, risk surface, and historical fraud records, F5 solutions can accurately distinguish fraudsters from real customers, without friction.

Maximizing business potential

Digital transformation is changing everything: how customers behave, where fraudsters focus their attention, and how organizations get ahead. Financial services institutions that fail to adapt face harsh regulatory penalties, customer churn, and lost revenue.

Unlike traditional security and fraud tools, which require extensive manual operation and introduce unnecessary friction, F5 protects your applications from fraudulent activity no matter how attackers evolve, while eliminating friction for real customers.

Combining F5 Online Fraud Prevention with processes and procedures that govern your security and fraud programs will reduce your losses, ultimately making for happier account holders.

This F5 traffic overview graph showcases an institution’s trends around total transactions, automated transactions, and non-automated (human) transactions. All three are critical data points for identifying fraudulent activities.

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