Changing the numbers: using technology to help combat card fraud

The global financial system is locked in a constant battle to prevent losses to fraud. As methods of digital banking have proliferated in recent years, banks and their partners have had to keep pace to maintain the security and integrity of their systems.

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The ANZ Plus mobile app

It’s a big and constantly evolving issue. Globally card fraud over the next decade will cost the industry more than $US400 billion in losses, according to industry research firm Nilson Report.

"Because the threat is constantly evolving, financial institutions must do the same to try and stay one step ahead of new fraud techniques.”

More than 2.1 million Australians (11 per cent) experienced one or more types of personal fraud in 2020-21, according to the Australian Bureau of Statistics. This included card fraud, identity theft and different types of scams.

The increase was driven mainly by a rise in card fraud, the most common fraud type experienced by Australians in 2020-21, the ABS found.

The good news is the banking industry is continually developing new security measures to help deal with card fraud. These measures have meant overall losses in the card payment industry have remained relatively steady as issuers, banks and merchants have introduced new systems.

The industry has developed frameworks to encourage secure technologies such as tokenisation, strong customer authentication, real-time monitoring and machine learning.

For example card skimming and counterfeit fraud was a big problem in previous decades. To deal with this issue, card providers introduced chip technology which helped prevent fraudsters from using card skimming to make fraudulent transactions.

At ANZ we are constantly searching for more ways to keep our customers’ data safe and secure.

One such advanced security feature we launched recently with our partners at Visa is a dynamic card verification value (CVV). The new feature will provide ANZ Plus customers with an extra layer of fraud protection for online and card not present payments.

Customers are used to providing the static three-digit number on the back of a payment card when paying for goods or services online. The CVV helps counter what is referred to as “card not present” fraud.

Card not present fraud mainly affects online transactions and occurs when valid card details are stolen and used to make purchases or other payments when the card number, expiry and CVV are keyed in. It accounted for about 87 per cent of all card fraud in 2019, according to industry body the Australian Payments Network.

Steps to preventing payments fraud

Losses from payment scams reported to the Australian Competition and Consumer Commission increased to $A323 million last year, from $A175 million during 2020. Here are some tips to keep your details and data secure:

  • Only provide card details on secure and trusted websites; look for the locked padlock icon
  • Treat unsolicited emails and text messages from people you don’t know with suspicion; don’t click on the link provided and don’t be tricked into divulging confidential data
  • Regularly check statements and report any unusual transactions to your financial institution
  • Register for your financial institution’s online fraud prevention solutions
  • Check to make sure any online business you’re dealing with is legitimate
  • Always keep your computer security software up to date

Source: ACCC Scamwatch

The dynamic CVV is another method of protection and an alternative to that static three-digit number. It provides customers with a constantly changing code, available within the ANZ Plus app.

The code automatically updates in the app every 12 hours and ANZ Plus customers can use the dynamic CVV code to make purchases online or over the phone. This offers customers greater protection against fraud and gives them greater peace of mind when shopping online or over the phone.

Because the threat of cybercrime is constantly evolving, financial institutions must do the same to try and stay one step ahead of new fraud techniques. And customers also have a role to play by remaining vigilant and making the most of new security features.

Jon Levin is Product Owner of ANZ Plus cards at ANZ

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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