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US lenders tighten checks after Equifax breach

by Alistair Gray

October 16, 2017 | 2:16 pm
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US banks are stepping up anti-fraud controls after the data breach at credit checking group Equifax put about half the country’s population at risk of identity theft.

 

Executives at banks including Citigroup and Wells Fargo said customers would face new checks because of the increased risk of identity fraud, a problem that already costs an estimated $16bn a year in the US.

 

While many companies from Yahoo to Deloitte have been targeted in cyber raids, the attack on Equifax is particularly worrying for banks both because of its scale and the type of information that was compromised.

 

Hackers stole records on as many as 146m Americans, including personal details such as social security numbers that consumer finance companies typically use to verify customers.

 

“You’ve got to put on some additional screening to make sure that you really are dealing with the person who they purport to be,” said John Gerspach, chief financial officer at Citigroup. “We’ve got other techniques, and other questions we can ask that are not part of the database that’s been breached.”

 

Companies that provide alternative authentication technology said banks were taking more interest as a direct result of the Equifax breach.

 

“A lot the banks are saying it’s a lightbulb moment for them,” said Vijay Balasubramaniyan, co-founder of Pindrop, which analyses voices to prevent phone fraud. “If you look at the information that got out, it’s everything banks use to identify you.”

 

John Shrewsberry, chief financial officer at Wells Fargo, said there would have to be “incremental precautions” following the Equifax data loss. He added that the additional steps could mean “a little bit more inconvenience” for legitimate consumers.

 

Banks are starting to gather more sophisticated data on how consumers interact with their devices – typing speed, force or accuracy, for example – to learn user behaviour and spot fraudsters.

 

Identity fraudsters stole $16bn from 15.4m victims in the US last year, $2m more than 2015, according to a study by Javelin Strategy & Research. Copyright The Financial Times Limited 2017

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by Alistair Gray

October 16, 2017 | 2:16 pm
12893  |   93   |   0  |   Start Conversation

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