To inform risk-based decisions, banks are adopting ever more sophisticated means of determining whether the device location and characteristics are reflective of what they would expect from the consumer.  For example, is the IP address showing as coming from Eastern Europe whilst the consumer is supposedly in the UK?  Or is the language setting on the device set to something different than the native tongue of the customer?

But what if the device itself is compromised?  It’s not as unlikely as you might think.  At a recent UK Card Fraud Conference such fraud threats are now raised by the European Network and Information Security Agency.  At this conference the consensus was that stronger security was vital.  For example, most consumers made no effort to house anti-malware on their smart phone, and would not think twice about downloading a (real or malicious) application (including “banking” ones) and actively entering and divulging credentials.

Technology and consumer convenience are, at times, driving beyond the anti-fraud headlights. This should be a real concern to us all.

Source:  FICO Banking Analytics Blog    To read more click on the link