Treasury & Risk - December 2010/January 2011

which costs banks about $1 per user, aims to block those entryways when the bank’s customer is engaged in online banking transactions. “It’s much more convenient than having a second computer” dedicated only to banking transactions, Boodaei says.

However, fraudsters are devious and continually seek new ways to penetrate the browser, or even infect a dedicated computer. “In terms of security, there’s no silver bullet,” Boodaei says, adding that Trusteer’s software automatically pushes upgrades out to users in the ongoing effort to counter new malware tactics.

For software such as Trusteer’s to work, however, banks’ customers must be persuaded to download it. As of mid-November, Sun Trust saw an adoption rate of 10% for online treasury users, McKinney says.

Sun Trust and other banks, large and small, are also taking a very different approach by implementing software that monitors corporate customers’ online banking behavior patterns. When the software spots unusual activity, it alerts the bank, which can then take action.

The First Data unit that caters to financial
services companies—mostly community
banks—plans to integrate its ACH services
with software from Laru by the first half of
2011. The Laru software will monitor a bank’s
customer transaction files sent by First Data,
developing profiles of each bank client.

Mellani Ocampo, the bank’s business banking education officer, says other solutions Pacific Continental considered tended to be rules-based, requiring the bank to define problematic activity and essentially predict fraudsters’ next moves. Guardian’s software instead maintains a dynamic profile of each customer, and so it more accurately spots unusual activity.

In October, the Federal Bureau of Investigation announced that a cyber-crime ring had stolen $70 million from U.S. banks. The announcement came a day after the FBI and overseas authorities made dozens of related arrests in the U.S., Britain and the Ukraine. In addition to stepping up enforcement, which may act as a deterrent, agencies such as the FBI and the Federal Deposit Insurance Corp. have recently issued warnings about the increase in online fraud.

Greater vigilance on the part of law enforcement and regulators, however, doesn’t mean banks and their customers can let down their guard. “It takes all these layers to keep this type of fraud under control,” Sun Trust’s McKinney says.