Statistics demonstrate that fraud accounts for $4 trillion dollars a year around the world. To that in retrospect, if fraud was a country, it would be the 5th most productive country in the world, ahead of top countries such as Canada and France.
Due to the innovation of the internet and online access to banking accounts, experts estimate that this number will continuously rise.
However, as technology advances, so does the security systems that banks utilize. In this overview we'll take a look at the top five advanced systems leveraged by the top world banks and how they help to deter and in some cases prevent fraud.
One of the technologies that banks utilize to minimize the instances of check fraud is the Magnetic Ink Character Recognition technology. MICR differs from the traditional type of ink in the sense that it produces a matte finish.
This special type of ink is readable by advanced mechanical sorters. What this means is that, if an individual produces a check with standard ink and it is placed within the mechanical sorter, if the sorter does not detect that matte finish that magnetic inks produces, it will refuse to read the check and essentially reject it.
One of the more interesting technologies that the banks utilize to prevent fraud is that all the major banks in the world print their checks with an encrypted code that contains the check information such as the real amount of the check.
What makes this encrypted code so unique is that, it is not visible to the naked eye and only appears when the check has been scanned, or copied digitally. The person who is scanning the check can actually pull up the information that lies within the encrypted code, to verify if the check is valid. We will definitely see more and more encryption over the years with banks and financial institutions.
Another technology that banks utilize to minimize the instances of identify theft, is what's known as an identify theft protection plan. Essentially, once a customer enrolls for an identity theft protection plan, it will raise their level of security significantly.
For starters, each and every time a purchase is made, the customer will receive a notification via SMS and or email.
Additionally, their credit scores will be continuously monitored and the customer will receive a notification if there are any changes to their credit scores or credit profile such as newly submitted applications for credit cards and/or newly established banks accounts for example.
Essentially, IP surveillance systems would be like Windows 8 while a traditional CCTV system would be similar to Windows 95. The problems with CCTVs are that, only a small portion of a bank's CCTV system would be attached to networked video recorders.
As such, monitoring and maintenance had to be done at a branch level. What these meant is that it relied on people to recognize and make appropriate actions to events that they would categorize as being suspicious. The end result of this is that, it would be virtually impossible for the bank to make a coordinated real time response to a suspicious event.
However, thanks to the introduction of IP surveillance systems, video streams from any bank location, can be monitored from a PC in a main office or any other branch that is within the network. Additionally, IP cameras enable higher quality pictures than its outdated CCTV predecessors.
A great place for more information is the IP surveillance cameras at SeicoSecurity.com. This organization showcases some of the most advanced IP-based security systems.
One of the more modern technologies that banks are in the process of deploying right now, is Facial and Voice Recognition technology.
What makes this technology so promising is the fact that, as opposed to utilizing a standard user name and password, if an individual wants to access their account on their mobile devices, they essentially have to take a selfie of their face and or speak into their phones.
The best example of face and voice recognition technology is that of USAA at AmericanBanker.com. This advanced system is being adopted in many respects across the world.