Trusted devices and silent signals could help FIs improve fraud protection

Financial institutions face a growing challenge in protecting customer assets while maintaining a seamless banking experience. And, as victims of Account Takeover (ATO) fraud continue to grow, the challenge is no longer just about preventing fraud, it's about restoring customer confidence in a digital landscape where trust has become the most valuable currency.

Fraudsters have become increasingly adept at manipulating customers, using sophisticated social engineering techniques to gain access to online banking profiles. In 2024, account takeover issues reached critical levels, with around 29% of Americans experiencing account ATO fraud.

Traditional authentication methods rely heavily on static passwords and one-time codes, which can be easily compromised. As nearly a third of US customers can attest, fraudsters can easily trick account holders into revealing authentication information by impersonating bank representatives, asking customers to read back one-time passwords (OTPs) or provide access to their online banking profiles.

Without a robust device trust mechanism, customers have no way to verify the legitimacy of these interactions leaving fraudsters free to take over accounts and make unauthorized external payments.

Silently securing the customer for better security and peace of mind

Customers are tired of being caught in the crossfire. They are nervous of experiencing financial losses and the emotional stress of potential fraud after an interaction with wiley fraudsters can leave them resentful towards their FI.

The most effective approach is one that combines trusted device technology with intelligent silent signals. The system creates a secure ecosystem by establishing a network of verified devices associated with each customer. Unlike traditional authentication methods, this approach goes beyond simple device recognition, incorporating sophisticated behavioral analysis.

Silent signals form a critical component of this more advanced authentication strategy. By analyzing unique user behaviors such as typing speed, mouse movements, and interaction patterns, the system can create a nuanced, dynamic authentication process. These signals work invisibly in the background, providing an additional layer of security that doesn't disrupt the user experience.

When a customer initiates a transaction, the system performs multiple checks. First, it verifies the device's trusted status. Then, silent signals analyze the interaction to ensure it matches the user's typical behavior patterns. For high-risk transactions, a contextual notification is sent directly to the trusted device, allowing immediate user verification, giving users peace of mind that they are fully in control.

A 90% reduction in fraud losses in external payments

The real test of the authentication strategy would come when customers were asked to adopt the new requirements. 

A recent implementation at a U.S. bank provides that insight.

Implementing a context-aware authentication solution that leverages trusted devices and silent signals, the bank managed to achieve a 90% reduction in fraud losses, particularly in external payment scenarios.

The approach proved particularly effective in preventing sophisticated account takeover attempts and, by virtually eliminating fraud for linked external accounts, the bank not only reduced financial losses but also rebuilt customer trust.

Customers experience the advanced security measures as a seamless, almost invisible process. Approximately 98% of logins and transactions occur without any visible friction. When additional verification is required, customers now receive clear, contextual notifications that empower them to actively participate in their own security. The bank communicated that the new system changes the relationship between them and their customers, reducing losses while still achieving a great customer experience.

As fraudsters continue to evolve their tactics, financial institutions must be equally innovative. This solution offers a proactive, intelligent approach to fraud prevention. It's not just about blocking threats, but about creating a dynamic, responsive security ecosystem. With trusted devices and silent signals, financial institutions can stay ahead of emerging threats, protect their customers, and build a more secure, trustworthy banking experience.