Is your FI’s security ready for the holiday shopping hustle?

October is Cybersecurity Awareness Month: a campaign to educate consumers and businesses about global cybersecurity threats and how to prevent malicious cyberattacks. And what perfect timing – a reminder to all financial institutions (FIs) to have their ducks in a row ahead of the upcoming e-commerce flurry... aka festive season shopping!

Those FIs that lack adequate security increase the risk of customers falling prey to opportunist e-commerce scams. Coupled with a bad user experience, FIs could lose revenue opportunities if their frustrations lead to cart abandonment.

In addition, there’s the impact of innovation like Generative AI on payment security into the bargain. Will it support safer online shopping or better equip fraudsters to steal customers’ funds (and the holiday spirit) with their cyberattacks? Read on to learn more.

As the holiday period approaches, with a flood of sizzling hot Black Friday and Cyber Monday deals, cybercriminals have their fraud scams at the ready.

Here are a few eye-opening statistics to remind banks and consumers what may lie in store:

What's more, per Splunk’s 2024 State of Security report, many of the usual suspects still feature high on the incident lists – data breaches, business email compromise and system compromise filling the top three positions.

But fraudsters are continually upgrading their attack vectors to bust through the security measures put in place to keep them out. And with the help of advances in AI, they have powerful new opportunities at their fingertips.

As frontier software companies continue to improve their artificial intelligence (AI) capabilities, the situation presents a double-edged sword from a technological perspective.

If we look at one example: Nvidia has made its latest AI model (Llama-3.1-Nemotron-70B-Instruct) not only more powerful (outperforming OpenAI and Anthropic, according to Venturebeat), but also open source. In other words, accessible to all. Unfortunately, this expands the attack surface considerably for cybercrime.

Conversely, technology companies, like Anthropic, are updating their safety controls to prevent hackers from accessing more fuel to scale and automate their attacks.

In fact, Anthropic recently discovered a capability that could “significantly enhance or automate sophisticated destructive cyber-attacks, including but not limited to discovering novel zero-day exploit chains, developing complex malware, or orchestrating extensive hard-to-detect network intrusions."

With the help of Generative AI’s fast-growing capabilities, fraudsters can deliver more sophisticated fraud schemes, like AI-enabled social engineering, with greater accuracy, speed and scale. Considering the 3,000% increase in deepfakes used in recent identity fraud, IBM reports, it’s clear that FIs need advanced security technology to counter these attacks.

Interestingly, while AI innovation can advance the dark side of digital payments, it is – by the same token – the solution to safeguard FIs and their customers from cybercriminals. Security solutions that use AI and machine learning (ML) can provide the necessary threat detection and intelligence in real-time to prevent these modern incursions.

FIs still relying on outdated authentication measures like passwords and one-time passwords (OTPs) during the holiday shopping maelstrom are an easy target for fraudsters.

Think about it... the technology behind solutions like OTPs is more than 20 years old! As a result, the level of security they offer is akin to installing a knee-high picket fence around a house to keep burglars out.

What’s more, since the technology is outdated, it delivers an outdated user experience. In other words, the exact opposite of what Black Friday and Cyber Monday shoppers need to grab that last-minute ‘75% off’ deal!

At Entersekt, we understand how important it is to keep authentication solutions up to date. We anticipate emerging fraud trends, like AI-enhanced fraud, and innovate solutions that help FIs get out ahead of these evolving risks.

Our 3-D Secure ACS, combined with modern authentication measures like biometrics and real-time risk intelligence, can help FIs reduce fraud, friction and false declines.

On a final note, while it’s important for consumers to be vigilant while shopping online, know that your bank takes fraud prevention seriously. In fact, the whole industry is working together to make the digital world a safer one. Advancements in AI technology have changed the fraud landscape in recent years, but the good news is that these tools work both ways. With the right combination of authentication strategies and risk intelligence, many modern attacks can be detected and successfully mitigated.