Independent Banker - February 2019 - 38

PORTFOLIO
" The technologies
allow for the
automated
discovery of
patterns across
large volumes of
transactions. "
-Jordan Blake, BehavioSec
already have a lot of information to
help them determine the direction of
fraudulent activity.
And, as is often the case when
dealing with huge, varied, disparate
amounts of data, " trying to find the
right combination of potential victims
is like trying to find a needle in a
haystack, " Smyth says. " A breach can
affect a large number of clients with
a huge number of transactions, but
there's still a degree of uncertainty. "
RBC began working with Terbium
Labs, a Baltimore-based cyber vendor
that specializes in monitoring
dark web data, to help the bank's Vanguard
unit better analyze the cards
and cardholders that have already
been compromised in order to develop
candidate groups, or potential fraud
victims identified using previous
crime patterns and current black market
data.
Card-issuing banks, their processors
and service providers have
been using neural networks-the
predecessor technology to machine
learning-for decades. But, as the
advent of chip-based cards made it
more difficult for crooks to clone cards
or commit real-world fraud, cardnot-present
(CNP) fraud blew up. In
response, card issuers and their partners
are increasingly turning to new
technology to help track down actual
fraud, as well as predict future fraud.
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Loan Participations Structured for the Community Bank Market
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The cost of fraud
Cyber developer Tender Armor
recently commissioned PG Research &
Advisory Services to research the cost
of fraud in CNP payment channels,
which now represent more than 70
percent of total gross-dollar volumes
of fraud on payment card accounts.
Their research found that there are
3.6 fraudulent card transactions on
average before the fraud is caught and
stopped. CNP transactions make up
nearly 30 percent of total credit and
debit card purchase volume, and that
percentage is continuing to increase
as consumers increase their use of
e-commerce.
U.S. banks and merchants are anticipated
to see more than $12 billion in
credit, debit, prepaid and private-label
payment cards losses thanks to fraud
by 2020, according to The Nilson
Report.
Chris Cook, chief administrative
officer and executive vice president
for $200 million-asset Farmers Bank
& Trust in Marion, Ky., says his community
bank may not be at the stage
of looking ahead in its card fraud
products. Working with card service
provider CSI Inc., the community
bank is " constantly monitoring the
card base activity ... looking for geographic
anomalies or [transactions]
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Independent Banker - February 2019

Table of Contents for the Digital Edition of Independent Banker - February 2019
