Could behavioral biometrics eradicate online fraud?

Some six percent of Europeans per day use credit cards online, mostly to buy clothes and shoes, according to Masterindex statistics. Although more and more consumers show interest in online payments, they worry about fraud, which could slow down ecommerce globally.

Why rob a bank when there’s cyber fraud? Contrary to expectations, the internet makes it a lot easier for fraudsters to scam people. They just need a simple unencrypted website, regardless of age, country or tech-savviness. In 2016 in the US, identity theft reached a historical peak, while fraud loss totaled $16 billion as a result of an increase in debit and credit card use by American consumers, according to Javelin Strategy & Research.

Because scammers are coming up with intricate strategies that are not always easy to detect, approximately one in ten online shoppers in the UK was a victim of cyber fraud in 2015. Online fraud brought criminals in the UK a profit of approximately £2m per week in 2016, and the figure jumped “a massive 1266% from 2015 figures,” according to KPMG.

Online fraud is not restricted to the UK. Approximately one in every 16 US shoppers fell victim to ID theft in 2016 at an incidence rate increase of 16 percent year-over-year, the Javelin report adds, and “card-not-present fraud rose a whopping 40% last year.” In spite of this, the figures show that the shift to the EMV standard aiming to eliminate card cloning helped, as counterfeit fraud has dropped 52 percent, according to Visa.

“While total losses — $16 billion — were up slightly over last year, they were still well below the $22 billion record set in 2012. (EMV) forces criminals to do things like use up all the counterfeit fraud accounts they have access to,” said Al Pascual, head of fraud and security at Javelin. “It also motivates criminals to look for other kinds of fraud. With the easy money of cloned card fraud drying up, thieves are experimenting more and more with account takeovers and new account fraud.”

Credit bureau Experian has partnered with tech firm BioCatch to implement a solution that might detect scammers and bots that use stolen information exposed on the dark web. The biometrics solution is part of the credit reporting company’s fraud prevention platform that confirms identity through an accurate analysis of user interaction elements such as typing speed, pauses between entries or mouse trajectory on a website.

"Behavioral biometrics is one of the up and coming techniques for defending against fraud," said for Reuters John Sarreal, director of product management at Experian. "It is effective in this day and age when you have more scripted attacks and more bot armies recruited to submit applications."

Experian is not the only company that has integrated behavioral biometrics. Voice and facial biometrics are now integrated in the security solution offered by Nuance for more thorough authentication and fraud detection. But will this be enough to eradicate cyber fraud? All systems are vulnerable. Biometric fraud incidents have already taken place as a result of an increased adoption of biometric systems. Time will tell if the solution proposed by BioTech is robust enough to at least reduce fraudulent activity.