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Allies Against Cyber Fraud
Constant collaboration with law enforcement agencies is required to combat the increasing threats from cyber criminals, say BAI Payments Connect panelists. byROBERT STOWE ENGLAND
February 28, 2012

As fraudsters become more organized and sophisticated in attacking banks, banks in turn must become more proactive in working with law enforcement agencies, say panelists at the upcoming BAI Payments Connect 2012 Conference and Expo.

“We used to refer situations to law enforcement as they came up, such as with counterfeit checks. But now, organized ID theft rings are able to hit many banks,” says Terry Thornton, senior vice president of financial intelligence at Comerica Bank in Auburn Hills, Michigan. “So, having the relationship there on an ongoing basis and meeting with your law enforcement officers is important because if something does happen, you’re ready to go and pick up the phone.”

“In an investigation, the quicker you engage law enforcement partners, the better your chances of success,” she adds.

Thornton is scheduled to speak on this topic in a March 12 session at the conference entitled “Enhancing Collaboration with Law Enforcement Agencies.” She says the discussion in Las Vegas will feature “success stories” in which cooperation with law enforcement officials led to the investigation and prosecution of fraudsters. Her co-presenter will be Kim D. Duncan, first vice president, Enterprise Fraud Management, at Atlanta-based SunTrust Banks Inc.

Thornton says that cyber threats raise the stakes for bank fraud prevention efforts. “As we move from paper to electronics, fraud becomes more complicated,” she says.

The Ponemon Institute, a data security research organization based in Traverse City, Michigan, estimated in its U.S. Cost of a Data Breach Report last year that each data breach incident costs about $7.2 million, or $214 per compromised record. The annual Ponemon report is sponsored by Symantec Corp. of Mountain View, California, and is based on actual data breach experiences of 51 U.S. companies from 15 different industry sectors.

To combat this growing threat, financial institutions need to be in regular contact with law enforcement on the local, state and federal levels to stay informed of current trends in criminal activity, as well as to keep law enforcement informed of what the financial institutions are experiencing, Thornton says. She adds that an ongoing relationship with law enforcement can yield valuable benefits, such as early access to warnings about fraud attempts. That, in turn, “can help you conduct investigations and ultimately protect your customers,” she says.

According to Thornton, the BAI Payments Connect panel discussion will build on an initiative to identify ways to improve collaboration developed by the Washington, D.C.-based BITS, the technology policy division of the Financial Services Roundtable, expanding on the recommendations in a May 2011 BITS paper titled “Establishing and Maintaining a Positive Relationship with Law Enforcement Agencies.”

That BITS paper “acknowledged the importance of financial institutions and law enforcement working together to share information about trends and report what they were seeing so as to take a more proactive stance in preventing some of the frauds that we’re seeing,” says Heather Wyson, who led the fraud program at BITS and is now senior director for risk management policy at the Washington, D.C.-based American Bankers Association. Wyson is working with Thornton to organize the BAI Payments Connect session.

“The criminals are collaborating – they’re sharing tools; they’re sharing information; and they’re sharing vulnerabilities,” Wyson says. “And, the banks realize they need to do the same thing to combat them.”

Mr. England is a contributing writer to BAI Banking Strategies based in Arlington, Va.


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