PERSPECTIVES FROM THE FIELD
The strength of Indiana is that we bring together a variety of perspectives from the plethora of areas that touch the field of cyber, especially through the Indiana Executive Council on Cybersecurity (IECC). Hence the name "Perspectives From the Field Series" in which we invite experts to discuss the real and challenging issues we are facing in the field and the proposed solutions from the experts to better the lives and businesses of all Hoosiers.
In the third of a three-part blog series, members of the Council’s Finance Committee share their knowledge and expertise about the impact artificial intelligence (AI) is having on all of us, here in Indiana, when it comes to doing business with a bank, credit union or any other financial institution. They’ll also discuss the types of scams that cybercriminals are using and what we can do to keep our accounts and investments secure.
Providing their perspective is Robert Blucker, who serves as the vice president of information security at Everence, and Karl Merkner, security engineer for United Federal Credit Union.
By Robert Blucker and Karl Merkner
Whether your idea of “going to the bank” involves visiting a local branch or logging into your account online, cybercriminals are using a wide range of tactics – from the resurgence of 'washing' a check to producing sophisticated AI-powered deepfakes – to try and separate us from our hard-earned money.
Indiana financial institutions are addressing increasing fraud through specialized forums, focusing on check fraud, wire fraud, and "high-risk" areas such as cryptocurrency and automated clearing house (ACH) transactions. As a result, AI is rapidly becoming a major tool for these types of scams.
And while it’s true that it’s the high-tech frauds that are dominating the headlines, many scammers still rely on tried-and-true methods to target bank customers. Some of the most common scams include:
- Fake bank fraud warnings. Scammers pose as bank representatives, claiming to investigate suspicious activity on your account.
- Check overpayment scams. Victims receive a fake check and are asked to return a portion of the funds before the check bounces.
- Online lending scams. Fraudsters target those with poor credit, offering easy loans in exchange for sensitive information or upfront fees.
- Imposter scams. Criminals impersonate government officials, tech support workers, or other trusted entities to gain access to bank accounts.
- Investment scams. Promising unrealistic returns, these scams often target victims through social media or unsolicited communications.
Among the more prevalent cybercrimes is identity theft. In the banking industry, it involves using stolen personally identifiable information (PII), such like social security numbers, birthdates, or card numbers to commit fraud, such as taking over existing accounts or opening new ones. With rising digital transactions, 26 percent of banks reported more than 100 cases of identity fraud just in the past year alone.
The role of banks and regulators
Financial institutions and regulatory bodies are working proactively to combat the rising tide of fraud. Banks are investing heavily in AI and other technologies to detect and prevent fraudulent activities. However, the rapid evolution of scam tactics presents an ongoing challenge.
According to a recent report, banks are actively exploring solutions to the problem, from cutting-edge behavioral analysis to experimenting blockchain verification. In spite of those efforts, the industry is constantly playing catch-up with new threat vectors like authorized push payment scams and ownership takeovers, where fraudsters takeover genuine businesses and use them to defraud their suppliers and partners, which, in turn, often happen to be banks.
While banks and regulators play a crucial role in combating fraud, individual vigilance remains the first line of defense. As part of that effort, banks provide tips to their customers to help safeguard their accounts.
Consumers are well advised to approach any unexpected and urgent money requests with extreme caution. It’s often a good idea to take a moment to step away from your phone or computer and question whether the person asking for money is truly who they claim to be or if the offer seems too good to be true.
The first step is to always verify any offer, deal or urgent request for money through an independent third-party channel. Call the bank directly or consult a friend to get their perspective before taking action and be sure to take the following steps to protect yourself from scams:
- Never share personal or financial information in response to unsolicited calls, emails, or texts.
- Be wary of requests for immediate action or threats of account closure.
- Use strong, unique passwords for all financial accounts and enable two-factor authentication where possible.
- Regularly monitor your bank statements and credit reports for suspicious activity.
- Be skeptical of investment opportunities that promise unrealistic returns.
- Verify the legitimacy of any organization requesting financial information by contacting them through official channels.
- Keep your computer and mobile devices updated with the latest security software.
With the advent of artificial intelligence rapidly gaining a foothold in our everyday life, it’s vital, now more than ever, for us to be vigilant in protecting our finances. And, fortunately, banks and financial institutions are working diligently to stay ahead of would-be cybercriminals trying to use technology to replace our trust.