Location Based Fraud Detection

Cell Phone Location as an Identity Validation and Security Product

Read it on this page, or download the .pdf 

Mobile phones are everywhere today.  There are over 5 billion phones across the planet.  More and more bank customers are relying on their mobile phone to interact with their financial institution.  Most research analysts expect mobile banking users to outnumber online banking users in just the next few years.  For most financial institutions, the mobile phone means enhanced communication and increased engagement. 

This white paper provided to you for Free from Finsphere will explain how the mobile phone can also greatly increase security and improve customer validation across all channels. 

Identity Validation Is Key to Security

The underlying issue with Internet security and financial fraud is consumer identity validation.  When your customers swipe their card, login to online banking, pull cash from an ATM or open a new account, how do you know you are interacting with your true customer and not a fraudster or imposter? 

Card fraud makes up the biggest single chunk of what is commonly called identity theft.  Typically, consumers do not detect fraudulent transactions until nearly 47 days after the transaction.  The easiest way to catch fraud is for consumers to look at their statement every day but the majority of consumers don’t do this. 

Consumers today are much more concerned with security and protecting their money.  However most consumer security precautions require too much consumer management and interaction or they are simply not effective enough.  Effective security is based on quickly and efficiently validating your customer’s identity while requiring as little as possible from the consumer.

The answer?  Mobile as Identity.

How it Works

Currently, there are more than 285 million mobile phones in the US and over 5 billion mobile phones worldwide. Because mobile phones are such personal devices, we carry them with us all the time. Since they are always communicating with the networks that serve them, they can be considered an electronic communications extension of ourselves. As mobile phones rely on cellular technology, the networks that serve them always know where they are.

Another characteristic of personal mobile phones is their unique identities. The identifying characteristic of a mobile phone is the mobile phone number. This number is up to 15 digits long and is unique worldwide among all mobile phones, regardless of country or network operator. Thus, the identity and location of a unique individual mobile phone can be considered an extension of the unique identity and location of that mobile phone’s user.

Mobile phones, along with the mobile networks that serve them, are perfect for supporting authentication of a person’s identity. When additional analytics are applied, the mobile phone can be a much more effective tool than strong authentication and dramatically better than relying solely on PINs, usernames and passwords for most consumers.       

Wireless Location Based Services (LBS) are now ubiquitous for consumers. Applications and services such as mapping, navigation, advertising and social networking are leading the way; however, Mobile as Identity and the use of network-based mobile location enables secure applications that include authenticating financial transactions, online banking activities, online access to secure sites, physical access for secure entry, as well as public safety and security.

Mobile as Identity, for financial identity theft, can validate the identity of a person making a financial transaction thereby verifying the transaction itself. Analyzing a person’s mobile phone number, the location of the mobile phone, information corresponding to the mobile phone’s use and the location where the financial transaction takes place is a highly reliable means to verify the transaction. Since the majority of financial identity theft occurs on existing credit and debit card accounts, credit monitoring solutions are inadequate for these everyday transactions. Mobile as Identity, though, requires only that a person carry a mobile phone when making a transaction – it is a simple and reliable method to identify and authenticate people.

Mobile as Identity Impacts many Industries

Mobile as Identity can be considered a suite of innovative mobile identity security and management solutions that help prevent instances of identity theft and deception across many industries and technologies, not just financial. These solutions can be offered directly to consumers or to businesses to protect both themselves and their consumers.

Financial 

Identity theft and deception impacts banks, brokerage firms, insurance companies and any business concerned with losses associated with stolen cash, securities and financial services. Mobile as Identity solutions can be valuable to both consumers and businesses:

• Used by consumers to protect card transactions.
• Used by creditors to approve loans.
• Used as a credit bureau to authorize consumers, for example, to approve credit.
• Used by banks for online banking access to protect fund transfers.
• Used by brokerage firms to protect trades and fund transfers.
• Used by insurance companies to protect against insurance fraud.
• Used by online merchants to protect theft of goods and services.

Using the mobile phone to validate a person’s identity also results in enhanced security, privacy and convenience for individuals. With the growth of mobile data usage and consumer adoption of both online and mobile services like social networking, solving the immense problem of securing personal information and data is paramount. Consumer privacy and data security is a primary concern, not only for every consumer, but for mobile network operators, corporate IT departments, enterprises, government agencies and special interest groups. Identity theft impacts so many and exposure of personal data happens on a daily basis.

As mobile phones are a necessity for most people today, simply carrying a mobile device is a simple and reliable method to identify and validate identity. Using network-based location to associate a mobile phone with the presence of its user is a highly secure means for confirming a variety of electronic transactions and activities, such as credit and debit card transactions, online website access, physical access to secure facilities and nearly any other secure electronic activity for which people might engage.

Is Mobile as Identity Right for your Financial Institution?

Identity validation is the key to strong security.  Successfully deploying and maintaining various identity validation technologies or security solutions can be a difficult, prolonged task.  With Finsphere, we have developed a solution set that makes deploying our technology extremely simple while at the same time highly scalable.  Finsphere manages the consumer opt in, deploys precision analytics systems for consumer validation and works with your technical staff and fraud team to determine the simplest integration route possible

See our technology in action

To further determine if your financial institution can take advantage of mobile as identity technology, contact Finsphere to learn more. 

We also encourage you to try PinPoint Free to get a sense of how the technology works.