Recently publicized data breaches are impacting the operations of
financial institutions, according to a recent survey by ACI
Worldwide (NASDAQ: ACIW). The survey of financial industry
professionals was conducted in March 2014 at BAI Payments Connect and
reports that 44 percent of customer accounts have been compromised.
The impact of data breaches
While the headlines continue to highlight data breaches, which involve
compromised payment, banking and personal data, financial institutions
must stay vigilant in combating fraud loss and maintaining customer
goodwill. More than fifteen percent of respondents indicated recent
breaches put increased pressure on fraud operations. And another twelve
percent indicated that they suffered a negative impact on their brand.
Twenty-two percent said they felt no direct impact from breaches.
“Managing fraud in the wake of a data breach involves having the right
tools to detect fraud as early as possible and using customer
communication programs that proactively address account holders’
concerns,” said Mike Braatz, Senior Vice President and Product Line
Manager, Payments Risk Management, ACI Worldwide. “Without proper
proactive and reactive fraud protocols, banks and issuers risk losing
customers and trust in their brands, even when the breach occurred
through no fault of their own.”
Shoring up preventative resources
More than seventy-five percent of respondents said they are looking at
additional resources to combat fraud in their organizations. Of those,
fifty percent said they are looking to invest in fraud
detection technology, more than fifteen percent are investing in
more training for their fraud management teams, and ten percent say that
they are beefing up staff with new personnel.
EMV’s role in protecting customer accounts
As the last holdout of EMV technology and standards, many in the US are
re-evaluating their strategies after these recent events. Regions
including Canada and Great Britain attribute decreased card fraud to the
more secure chip and PIN methods employed as part of their EMV
strategies, which were rolled out years ago. More than forty percent of
respondents indicated they are more aggressively looking at their EVM
plans. Another thirty percent are still exploring options required to
meet the 2015 liability shift, and just under ten percent indicated they
are already EMV compliant.
A silver lining
Although data breach-related fraud has a negative impact on the bottom
line and on the industry in general, more than forty percent of
respondents indicated that their customers appreciate the proactive
outreach and response to market events.
According to Braatz, “Customers want an open dialogue with their
financial institutions when it comes to protecting their payments and
personal data. When executed properly, a payments risk management
strategy, which keeps customers informed – early and often – in the
event of a fraud or data breach will keep financial institutions on the
right side of customer satisfaction and ensure trust in their brand.”
About the Survey
The survey of fifty financial industry professionals was conducted by
ACI Worldwide at BAI Payments Connect in Las Vegas on March 10-11, 2013.
The survey includes responses from executive/management decision makers,
fraud/risk management, and back office operations at financial
institutions.
About ACI Worldwide
ACI Worldwide, the Universal
Payments company, powers electronic payments and banking for more
than 5,000 financial institutions, retailers, billers and processors
around the world. ACI software processes $13 trillion in payments and
securities transactions for more than 250 of the leading global
retailers, and 21 of the world’s 25 largest banks. Through our
comprehensive suite of software products and hosted services, we deliver
a broad range of solutions for payment processing; card and merchant
management; online
banking; mobile, branch and voice banking; fraud
detection; trade finance; and electronic
bill presentment and payment. To learn more about ACI, please visit www.aciworldwide.com.
You can also find us on Twitter @ACI_Worldwide.
© Copyright ACI Worldwide, Inc. 2014.
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Copyright Business Wire 2014