Fraud Capabilities: How American Banks Detect and Prevent Fraud

Fraud Capabilities: How American Banks Detect and Prevent Fraud

Fraud Capabilities: Bank of America, USAA

Bank of America and USAA protect their customers from fraud using zero liability policies, biometrics, and multifactor authentication processes. Details regarding the tactics the two banks are using to prevent fraud have been provided below.

1. Bank of America

  • Bank of America has an Online & Mobile Security Guarantee, which ensures that its customers are not liable for any unauthorized transactions or purchases as long as they are reported promptly. The guarantee is applicable to both mobile and online transactions. In addition, the bank reimburses its customers for any late-payment-related charges they have incurred in the event that they fail to process payments in time.
  • Bank of America has ensured that all its customers can access fraud and security resources from its website to ensure that they understand the different ways of protecting themselves from fraud. These resources show customers how to manage their security, how to set their privacy choices, and how to customize their alerts.
  • Furthermore, the Bank of America has a Global Information Security team that is tasked with continuously monitoring potential threats to prevent fraud.
  • The bank also prevents fraud through its “Verify Your Visa Card is With You” program, which enables the bank to approve customer transactions when they travel. For instance, when customers make a purchase, the bank uses their phone location services capability to see if where the purchase was made is where the phone is located. The feature is compatible with both cellular data and Wi-Fi.
  • Bank of America has a secure infrastructure since its data centers have strict physical security protocols, round-the-clock personnel, multiple power grids, and world-class firewalls.
  • In addition, fraud monitoring is provided for accounts where customers are sent alerts in case of any suspicious or unusual activity.
  • Bank of America also uses a risk-based, multi-factor authentication process that can validate a customers’ identity whenever they access their accounts. Furthermore, the bank provides dedicated support and customers do not incur liabilities for any authorized transactions.

2. USAA

  • All members of USAA are automatically enrolled in the bank’s security and fraud alerts program. Therefore, customers’ accounts are protected on a 24/7 basis and alerts are sent to them in case of any suspicious activity. In addition, the bank has provided several guidelines and resources on its site on the ways customers can prevent fraud.
  • The bank’s website has malware and virus detection software and is encrypted to protect the information of customers. In addition, the bank has additional security measures to respond specific events or activities. To mitigate online fraud, the USAA has multifactor authentication to protect a user’s accounts and personal information.
  • Also, USAA has a security program comprised of dedicated teams that can detect and investigate any suspicions.
  • Moreover, USAA has a zero liability policy where members are held responsible for any unauthorized charges on their debit or credit cards.
  • Enhanced Logon is another security feature that the bank has to strengthen logon security. The bank offers features, such as biometrics, browser recognition, CyberCode token, quick logon, and CyberCode Text.
  • Biometrics is primarily used with the USAA Mobile App. Here, customers have the option of using their face or voice depending on their environment.
  • Browser Recognition allows customers to notify the bank about their trusted device. When customers use their trusted devices, they can proceed with their transactions using their PIN, password, and online ID. However, when accounts are accessed from untrusted devices, customers are prompted to login with an extra security measure.
  • CyberCode tokens generate unique security codes after every 30 seconds. In this case, customers can logon with a new password consisting of their PIN and security code every time they log on.
  • Instead of using a password and PIN or online ID to logon, customers can easily use their pins to access their accounts using Quick Logon, which “uses Symantec validation and ID Protection (VIP) technology to generate one-time security codes.” Therefore, users can login with a unique password every time using their PIN and a security code.
  • CyberCode Text acts as a replacement to a PIN and has an added security measure. Users can logon as usual with their password and online ID; however, they are required to enter a unique code that they get via text message instead of using their PIN.

Fraud Capabilities: Chase, Wells Fargo

Chase and Wells Fargo are using solutions powered by machine learning and artificial intelligence, respectively, to prevent and detect fraud. Chase’s Voice ID uses voiceprints to verify customers calling the customer service center, while Wells Fargo allows customers to use fingerprints and facial recognition to access its mobile app. Chase and Wells Fargo offer various tools as part of their fraud protection services for commercial banking customers.

3. CHASE

Use of Machine Learning-Powered Solutions

  • Chase uses machine-learning powered solutions to “detect fraud and highlight suspicious activities” in three ways.
  • The company uses supervised machine learning to spot fraud and correlate the action back to the data to verify if it “follows a similar pattern.”
  • The unsupervised machine learning model focuses on detecting new patterns that allow the company to “conclude that this pattern of activity is suspicious.”
  • Lastly, Chase uses machine learning to “enact changes based on the collected data,” which include implementing additional rules or safeguards.

Biometrics and Fraud Protection for Personal Banking Customers

  • Chase’s Voice ID uses voiceprints to verify their customers and protect them and their accounts against fraud. This security feature allows customers to access their accounts quickly and securely when they call the bank’s customer service center. The voiceprint is created from over “100 different physical & behavioral characteristics such as pitch, accent, shape of your mouth, and vocal tract.”
  • In general, Chase offers fraud protection to personal banking customers by not holding them responsible for unauthorized charges made with their card or account information (Zero Liability Protection), providing real-time monitoring for suspicious activities (24/7 Fraud Monitoring), and temporarily locking their cards if they misplace them (Lock & Unlock Card).
  • Customers can also sign up for the Chase Credit Journey to receive notifications when there are changes to their credit reports. Learning about critical changes can help them to identify potential fraud.

Fraud Protection Services for Commercial Banking Customers

  • Chase offers various tools as part of its fraud protection services for small and mid-sized businesses.
  • The Check Monitoring tool allows users to “review and approve checks presented for payment, set payment limits, and sign up for alerts.”
  • Customers can use Chase’s Check Protection Services to “validate checks presented for payment (and note discrepancies)” based on the information provided to the bank.
  • The Automated Clearing House (ACH) Debit Block tool allows users to block all ACH debits from their accounts or inform the bank who is authorized to post ACH debit transactions.

4. WELLS FARGO

Use of Artificial Intelligence-Powered Solutions

Biometrics and Fraud Protection for Personal Banking Customers

  • Instead of usernames and passwords, customers can access the Wells Fargo Mobile app using their fingerprints or facial recognition. This feature is available for iPhone/iPad (Touch ID/Face ID) and Android (Fingerprint/Biometric Sign-On) users. Wells Fargo will help to disable the feature if the device is lost or stolen.
  • In general, Wells Fargo protects its personal banking customers from fraud by allowing them to set up alerts for online purchases, ATM withdrawals, and other transactions, activate 2-Step Verification, and remove their old number from the mobile banking profile if they lose their phone or change their number.
  • Wells Fargo’s Fraud Education Library provides fraud prevention tips and other related resources.

Fraud Protection Services for Commercial Banking Customers

  • Wells Fargo offers several tools as part of its fraud protection services for commercial banking customers via the Commercial Electronic Office (CEO) solution.
  • Customers can use the Wells Fargo ACH Fraud Filter and Perfect Receivables service to protect themselves from ACH fraud. The “Stop” feature of the ACH Fraud Filter will automatically stop all ACH debits from posting to their accounts except for those that have been pre-authorized. The Perfect Receivables service is designed to protect accounts by providing “proxy” account numbers for customers to use when remitting ACH and wire payments.
  • Dual custody can be implemented to prevent mobile fraud. It requires “payments and user changes initiated by one user be approved by a second user on a different computer or smartphone before they take effect.” Dual custody is considered “one of the most effective fraud deterrents in a layered security approach.”
  • Wells Fargo also provides tools for preventing fraud related to positive pay transactions (Positive Pay) and checks (Add Check Issues).

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