A new approach to authentication could solve problems associated with trends in performing higher value and faster banking transactions over the internet
The recent introduction of the Faster Payments Scheme looks set to spell an end to frustration for customers wanting to transfer funds quickly. Following a 2005 decision by the Office of Fair Trading that the system should be made more efficient, a one-off payment up to a maximum value of £10,000 made over the telephone or via the internet can now leave an account and arrive at the destination account on the same day.However GrIDsure, the developer of a revolutionary new approach to authentication, is concerned that while the system is being gradually phased in to create greater efficiency, many financial institutions may have under-estimated how vulnerable the new system will leave them in terms of fraud – because of the sheer speed of transactions and the removal of the former 2-3 days’ waiting period, which allowed more time for checks to be made. “It’s great news for consumers that they will be able to make transactions exactly when they choose without banks making interest on money that disappears into a transfer black hole, but the banks and their account holders could become very vulnerable without the few days ‘grace’ they had previously to check for fraudulent transactions,” warned Jonathan Craymer, chairman, GrIDsure. “All this stresses the importance of banks adopting stronger ‘upfront’ authentication to check the identities of those due to receive funds. With only 15 minutes’ before money leaves bank accounts, it’s going to make it frighteningly easy for criminals to make off with innocent victims’ money before anyone realises anything is wrong.” Fraud on credit and debit cards soared by 25% last year, reaching a record high, with losses of £535m and the increasing popularity of internet banking looks set to make this worse before it gets better. “The sad truth is that fraud is getting out of hand and while it’s vital that we move forward with developments like Faster Payments, it’s worrying that banks may not be able to keep up in the battle to banish costly fake transactions,” continued Craymer.
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