Fraud In The Future
Experts Predict New Skills/More Risk Management
The latest report from the experts at the National Criminal Intelligence Service says organized crime will become more sophisticated and networked in the near future. They expect payments of computer chips and rare metals to be traded between crime rings to avoid leaving electronic trails.
Criminals have already exploited online banking and gambling, according to one source, and are developing what they call virtual drugs - machines that will stimulate parts of the brain. This technology is called cybernarcotics. These virtual reality drugs can be transmitted across the Internet or by using radio waves.
Because of the advances in identification systems through biometrics, agents anticipate kidnapping incidents will increase, as access to funds can't be made without a living subject. Increased training in kidnapping response has already begun to take place in several of the agencies' agendas.
In addition to the familiar hacking into computers, newly developed methods of disruption of sensitive computer equipment using high intensity radiation devices may be the source of blackmail and extortion schemes, or of terroristic activities, according to the futuristic technologists.
Security experts insist the situation is not hopeless. Bill Wipprecht, Security Director for Wells Fargo Bank in San Francisco, states that while it appears that the "game and incentives" favor the criminal, with security playing "catch-up", such is not the case.
"Current and future technology is our greatest asset in the war against financial crimes," he said. "While it often appears that the criminal may be winning in the short term, we are in the process of expanded use of smart cards, bio-metrics, further development of neural-networks, adoption of encryption world-wide, and forming new alliances between traditional security groups and their IT counterparts. We have seen the enactment of better computer laws and aggressive prosecutions. These will be the financial industry's crime prevention tools of the 21st century.
"In reality, it's always the criminals who play "catch-up" by being forced to invent new tools or methods to circumvent technological advances in security."
Roger Snell, Senior Solutions Manager for Fraud at Carreker- Antinori in Dallas agrees. "Many banks are already ahead of the curve, having implemented fraud detection systems for on-us items, deposits and teller related transactions," he said. "These systems, along with other risk management solutions such as kite detection, positive pay, new account screening, etc. have dramatically reduced check related fraud in the past, and as they are refined, will also manage future developments.
"As the electronification of the payment system continues, the financial industry has already realized the emphasis on know your customer at POS or POP will become even more important than today. With all these risk management systems, the criminal will still be the loser."
Copyright © 2000 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 9, No. 12, 1/00
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