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Can Secure Crisis Communications Help Reduce Financial Fraud?

financial_fraudFor all its power, a crisis communications solution has no proactive ability to prevent financial or banking fraud. There are other technologies that specialize in that area, and many of them are quite effective.

This blog was written by Noah Webster, Division Counsel at AtHoc.

That said, AtHoc crisis communication solutions can be valuable in helping financial organizations respond faster and more effectively to fraud. A more rapid response to intrusion can potentially save millions of dollars by reducing the scope of funds that are exposed, and the damage associated with liability and negative publicity after the incident becomes public knowledge.

Consider a real-world situation that occurred at the Federal Reserve Bank of New York. The country of Bangladesh discovered, after the fact, that over $101 million had been siphoned from its Fed account.

Thirty-five orders placed through a secure interbank messaging system were used to claim funds belonging to Bangladesh, requesting transfer of nearly $1 billion to banks in Sri Lanka and the Philippines. Five of the transfers went through, representing the $101 million loss, while $20 million was recovered. Much of the remainder was apparently laundered through gambling casinos.

The abuse of the secure interbank system is troubling, in and of itself. However, the entire scam might have been avoided if officials at the New York Fed had been able to reach Bangladeshi officials in time to interdict the fraud.

It is believed the attack was timed to exploit the vulnerability of bank business hours. The Fed’s systems actually flagged the transactions as suspicious, but attempts to contact representatives in Bangladesh occurred after normal business hours there and were not successful. Then, the business week in New York ended, and additional attempts to verify the transactions were not attempted until after the following Monday.

Here is how AtHoc might help prevent similar losses in the future.

As soon as a financial institution senses a potential fraud attempt, AtHoc’s secure crisis communications would go into action. On-call and other appropriate officials at the organization suspecting the attack would be immediately notified using channels ranging from phone calls to texts to email. The notified officials or, if appropriate, an emergency response team, could then execute the response plan.

All customers and other financial organizations affected by the fraud or breach would also be alerted using AtHoc communication solutions. Since these officials would have previously granted permission to be contacted after office hours, they would be reachable in the evening and over the weekend. Acknowledgment of the alert could be obtained. Unauthorized transfers could be flagged quickly and prevented.

Scenario-based, permission-driven crisis communications deployments powered by AtHoc feature critical capabilities, such as advancing automatically to the next available authorized staff member, if a primary contact cannot be reached.

AtHoc is particularly well suited to this type of financial security technology role.

AtHoc is part of the BlackBerry family – an organization known for providing the type of rigorous and secure enterprise communications that financial organizations demand. Other BlackBerry products, such as Good Technology’s Secure Mobile Platform for Business, provide additional, exceptionally high levels of security for both one-way and two-way communications across mobile devices, ensuring that essential managers can be reached immediately and confidentially during a crisis.

These complementary, integrated solutions protect financial communications from inappropriate access and unauthorized use, so that recipients can have trust that what they are being asked to do is officially approved, sanctioned, and necessary.

There are better ways to respond to financial fraud, and AtHoc is at the forefront of bringing these solutions to market.

(This was originally published on the AtHoc blog.)

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