Iranian banks need tech to face growing cyber threats (exclusive)

Business Materials 5 December 2016 20:46 (UTC +04:00)
Iranian banks need tech to face growing cyber threats (exclusive)

Tehran, Iran, December 5

By Mehdi Sepahvand –- Trend:

“In Iranian context this issue will have significant meaning when Iranian financial system enters world payment system and get more exposed to global crime scene. While isolated from the rest of the world payments system, Iran is somewhat protected from global threats, such as fraud and other cybercrimes. Once it goes global, and it will in some time, the scene will change drastically. With global world payments system goes also global crime,” says Mrs Suzana Stojakovic–Celustka, CEO of InfoSet d.o.o., Croatian IT company specialized for consulting and software services in information security.

“The globalization of financial services and the increasing sophistication of financial technology mean that the risks of today are more complex and far-reaching. Being at the very heart of a commercial bank’s activities, payments are certainly not immune to these forces. There is a growing realization that the risks associated with payments processing have the potential to become substantial, yet banks and other financial institutions can take advantage of the sophisticated tools now available to help them manage these risks in a proactive manner,” she told Trend while in Tehran on business convention.

Payment fraud is any type of false or illegal transaction completed by a cybercriminal. The perpetrator deprives the victim of funds, personal property, interest or sensitive information via the digital transaction means.

These days fraud goes international. This fraud is perpetrated by international fraudsters who understand how to work the payment system to their advantage, at the detriment to the business. The aim is to extort product and/or money from the business and they have many elaborate scams associated with their international fraud activities.

To make things worse, fraud patterns evolve quickly and constantly. Thus, as companies put in place measures to prevent fraud, perpetrators quickly adapt and find ways to circumvent them. There is clearly a need for better processes and tools to enhance their fraud detection and investigation.

“To analyze and understand how and where fraud happens, one cannot just rely on the experience and intuitions of even the best investigators, or the analysis of standard fraud reports and basic metrics. Also, the more common analytical tools appear ineffective to scan very high and fast-growing volumes of data – where critical information to understand fraud patterns and hidden paths is buried,” Mrs Stojakovic–Celustka said.

“Identifying fraud patterns means to find out: where fraud comes from, how it happens, who is involved and what areas of the business it impacts.”

“Fast-developing predictive analysis technologies offer great potential for improvement of fraud detection and prevention. They can help companies get deep insights into how and where fraudulent transactions originate, and analyze changing fraud patterns, in order to enhance their fraud detection strategies and adapt faster to new types of attacks.”

“Wide use of predictive and intelligent analytics in detecting and preventing fraud and security threats should be common practice in finance industry. The next response in security is cognitive computing.

Cognitive security systems may use analysis methods such as machine learning, clustering, graph mining and entity relationship modeling to identify potential threats. This can help speed detection of risky user behavior, data exfiltration and malware before damage occurs,” she noted.

“The solution for Iran and rest of the world is in building intelligent security systems capable of fast and reliable response.”

“To prevent and predict fraud and other cybercrime in real time without affecting the experience of customer we need an intelligent system capable to: learn or understand from experience, acquire and retain knowledge, respond quickly and successfully to a new situation, make proper decisions, etc. An intelligent system for fraud detection and prevention has to be: ‘invisible’ to customer, fast, reliable, precise (with small amount of false positives or negatives), small and adaptive.”

“Artificial intelligence is no longer a dream of the future. Intelligent systems exist, and there’s nothing artificial about it. Cybersecurity in banking payments systems today can benefit as a result. So, we in InfoSet d.o.o. are looking for Iranian partners in this field to develop further our concepts so to satisfy mutual interests.” concluded Mrs Stojakovic–Celustka.