Banks Need to Act to Combat Rising Cases of SIM Swap

263
Filed under - Archived Content

Following reports that SIM swap fraud is one the fastest growing types of fraud in the country, Aspect Software has warned that banks and payment services providers (PSPs) need to cease using SMS-only methods to authenticate online transactions to clamp down on the epidemic.

Increasing numbers of banking customers are falling prey to SIM swap fraudsters, comments reportedly coming from Halifax’s customer service team have revealed. SIM wwap victims’ messages from their banks are redirected to a different phone with an identical SIM card, meaning that hackers can access their bank account details through one-time passwords sent by SMS.

Stephen Ball, Senior VP Europe and Africa at customer engagement expert Aspect, says that while SMS identity checks are easy for account holders to use, banks and PSPs need to employ multi-factor authentication methods to improve the security of their transactions: “SIM swap is a problem that cannot be ignored. With successful fraudsters redirecting SMS without the victim knowing about it, by the time the bank reacts to the crime, the hacker may have already escaped with their target’s finances. There needs to be more action from PSPs to head this kind of activity off before more customers are affected.”

Last year, the European Parliament formally adopted the revised Payment Services Directive (PSD2). This boosted the protection of online and mobile transactions by requiring PSPs to use multi-factor authentication for internet payments. The rules state that the two or more methods of authentication must be independent so they cannot be compromised by each other.

“This was a great initiative for driving greater security for online payments,” Ball continued. “However, PSPs need to seriously consider their customer experience when employing new security procedures such as additional authentication layers. They need to balance ease of use with adequate levels of security to protect their customers’ accounts. SIM swap checks, divert detection and location detection are simple procedures that can be undertaken without the customer being aware of them. The user’s identity is much more secure against fraudsters but they still have a great experience when making a payment.”

He concluded: “The rising awareness of SIM swap ought to prompt PSPs and banks to take steps to secure the protection of their customers, without negatively impacting their customer experiences. For those that do not, savvy customers will quickly choose alternative providers for their banking.”

For more information, visit www.aspect.com/uk

Author: Rachael Trickey

Published On: 22nd Apr 2016 - Last modified: 6th Feb 2019
Read more about - Archived Content

Follow Us on LinkedIn