Tech Portal: Software firm urge banks to update security

Banks and payment service providers are being ordered to update their security systems in order to protect customers from the threat of identity fraud.

It’s feared that new security roles that are coming into play imminently could open a gaping hole for fraudsters to take advantage of.

Security firm Aspect Software has spoken out about its concerns over banks and payment services providers which use text messages to authenticate customers.

August 1st will see new European Banking Authority rules come into play which will require financial institutions to use or two or more ways of authenticating customers,

Keiron Dalton, mobile security expert and Director of Cloud Services at Aspect, feels that although the move can only be a good thing for security as a whole, there may be more opportunities for scammers.

He said: “These rules will bring about major changes in digital banking. No longer will banks be able to simply provide solutions to customers on the basis that they are quick, they are also going to have to consider how secure their systems are and how much they are protecting customers’ interests.

“The new two-factor authentication process being suggested will require a lot of payment service providers to rethink their current models, which are increasingly using one-time passwords (OTPs) via soft (SMS) or hard tokens (small plastic devices) to complete transactions. Unfortunately, although it is popular, SMS is easy to compromise.  

Dalton added that banks should act now to be ready for the change in regulations and that they should be aware of any potential new threats.

He stated: “PSPs and banks must consider whether an easy and quick mobile banking app is better than a secure one, and the risks that go hand-in-hand with that, or, they can choose to try and strike a balance.

“Hard and soft tokens are proven to be fit for purpose, but interrupt the natural flow of the transaction; after all, consumers are busy people.

“With the importance of the customer experience rising thanks to seven day switching and the changing expectation surrounding convenience, technology has a big role to play in almost undetectable verification.”