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Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

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October 25, 2021

Should We Throw in the Towel When It Comes to Data Breach Prevention?

Cybersecurity Awareness Month, observed in October, reminds us of a post we ran two years ago. We're rerunning it today because it is just as relevant now as it was then, and perhaps even more important. This year's Data Breach Investigations ReportOff-site link, for example, found that 85 percent of breaches involved a human element. As the Risk Forum has often said, the human element is the weakest link when it comes to cybersecurity. So the closing question posed by my colleague and the author of that post is as imperative today as organizations consider that human-caused breaches are inevitable: "What approach has your organization taken to adopting threat prevention and response preparedness?"


We've all heard it said—we've probably, cynically, said it ourselves: "It's not a matter of if but when your company will be hit by a data breach." Reports about cyberattacks and network breaches fill my daily newsfeed with headlines on ransomware attacks, attacks on multifactor authentication, and 5G network vulnerabilities. For each new, better, stronger, faster solution the industry comes up with, criminals find a way to circumvent it in seemingly short order. Is there anyone whose personal information hasn't been stolen once, twice, five times? I've lost count of how many times I've received six months of free credit monitoring.

In today's world, is there any way for an organization to fully protect itself against the broad spectrum of ever-evolving threats and still have time, resources, and capital left over to conduct its everyday business? Or should we assume that breaches are a foregone conclusion, throw in the towel when it comes to prevention, and turn our focus instead to incident response?

According to Verizon's 2019 Data Breach Investigations Report , small businesses were frequent targets of breaches. (The report looked at incidents occurring from November 1, 2017, to October 31, 2018.) Other findings it reported: outside actors perpetrated 69 percent of breaches, 52 percent were the result of hacking, and it took months or longer to discover 56 percent of the incidents.

Last year, I wrote about committing to muscle memory your organization's plan for the right of boom. A Google search on "data breach response" returns pages of results with guides, resources, and services, but the midst of a cyber-event is probably not the best time to come up with a plan. Turns out, there's an app for that! At a recent fintech conference, I saw a demo of a dynamic breach response solution that turns response into a routine business process. The company likens its app to "an airbag for network breaches" and claims the tool helps organizations prepare for, detect, and respond to data breaches. Another company demonstrated a white-labeled application for financial institutions that aims to reduce post-breach fraud and identity theft of consumers through algorithmic risk assessments that produce recommendations for actions to take to mitigate these risks.

National Cybersecurity Awareness Month bannerOctober is National Cybersecurity Awareness Month. It's a good time to review your own right of boom plan or take steps to implement one. One resource: the Department of Homeland Security's Cybersecurity Resources Road Map  for small and midsize businesses.

While it is not hyperbole to assert that criminals will breach your organization's network, you should not throw in the towel or lower your defenses against such threats. Rather, you should avail yourself of technological innovations to support breach prevention and response preparedness so your organization can restore normal business operations as quickly as possible. What approach has your organization taken to adopting threat prevention and response preparedness?

September 20, 2021

Changing Fraud Strategies: Fraud Fighters

Editor's note: This is the second post in a three-part series.

I recently read about a payment company that responded to emerging fraud schemes by doubling its staff associated with fraud mitigation. The talent the company sought for these roles are in high demand, so I took to the job boards to see what hiring strategies emerged in relation to the trending fraud schemes.

Back in March, I posted the first of a three-part series on changing fraud strategies. That post looked at shifting trends in payments fraud. In this post, I share what I found on the job boards to illustrate how the approach to fighting fraud might be shifting in response to the new types of fraud. (I'll continue that theme in the third post.)

Account takeover fraud
Many of the listings I saw made it clear that organizations want candidates with account takeover expertise. I read statements like "Candidate must be capable and driven to identify, mitigate, and resolve account takeovers" and "Job duties include monitoring accounts, queues, and transactions for possible account takeover and to prevent processing of unauthorized transactions."

Companies are also catching on that account takeover fraud can't be mitigated by a single department of fraud fighters such as information security—it takes collaboration across many lines of defense. In fact, a recent report Adobe PDF file formatOff-site link on account takeover fraud noted the critical need for organizations to ensure that all internal departments understand the organization's liabilities in accessing company networks, databases, employee information, and financial data. Job postings with a focus on account takeover had statements like "will work cross functionally across the enterprise" and "partnering across the enterprise to unify and strengthen strategies to address account takeovers."

New account opening fraud
Sometimes grouped with application fraud, these schemes are hard to detect, leaving many businesses vulnerable. Let's face it, businesses naturally want new accounts. If creating new accounts becomes an area of friction, that can affect a company's bottom line.

That's why mitigating this type of fraud involves balancing the confluence of forces at play, including privacy, customer service, sales, and compliance. Based on some of the job listings I reviewed, organizations are showing signs of adjusting to the rise of risk here. For example, one bank was hiring a salesperson who "must adhere to new account opening procedures to prevent fraud." There were many openings that listed such compliance responsibilities.

One position specifically wanted a subject matter expert in detection, investigation, and prevention of synthetic, identity, and new account application fraud. The job also required extensive collaboration across the enterprise and with law enforcement.

Online fraud
You immediately get a sense of how widespread and varied online fraud is when you look at the listings for companies that are "urgently" hiring fraud analysts or researchers. Some of these companies are in mortgage, health care reporting, home improvement retail, telecommunications, or, of course, e-commerce.

Interestingly, I saw more than just entry-level or intermediate positions for online fraud workers. One e-commerce company was seeking a "head of eCommerce fraud operations." The company said the candidate should "have a passion for managing people" while also wanting to build an organization. A multinational technology company was looking for a "manager of payments trust and safety," who would be tasked with tackling the biggest problems that challenge the safety and integrity of their products.

It takes more than talent
Organizations have a high demand for workers who can help the whole enterprise focus on fighting fraud and who also have analytical and decision-making skills and can make changes to strategies and systems. Of course, talent is only one part of the fraud fight. In the final post in this series, we will explore how technology is being used to tackle the fraud trends.

August 30, 2021

Is Quantum Computing This Generation's Y2K?

I have a clear memory of December 31, 1999, when the world held its collective breath as the clock ticked down to the new millennium. Were we prepared, or would the doomsday predictions of chaos following a worldwide breakdown of computer infrastructures come to pass? As we now know, midnight came and went and as the sun rose in the east, all was well. Twenty-plus years on from the millennium bug, could developments in quantum computing be this generation's Y2K event? At least with Y2K, we knew when it would happen.

The computer hardware and software we use today operate on a binary number system, combinations of ones and zeroes used in programing code and mathematical formulas ranging from the simple to complex. These binary digits, known as bits, form the basis of digital data. To protect digital data from being manipulated in unauthorized ways, various levels of encryption are employed for data storage and transmission, with 2048-bit RSA cryptography being one of the most common formats. RSA cryptography uses a combination of a public encryption key to transmit data and a private decryption key held by the receiver. (RSA stands for Rivest, Shamir, Adleman—the names of the creators.)

"Man in the middle" attacks occur when cybercriminals intercept secure data transmissions and private decryption keys, often through phishing, malware, and Wi-Fi eavesdropping. While not unbreakable, 2048-bit RSA encryption is considered nearly impenetrable because traditional computers have limitations in their processing capabilities. Estimates for the time it would take for a computer using today's most robust processing capabilities to decrypt a 2048-bit algorithm run from several hundred million to several hundred billion years.

However, quantum computing has the theoretical ability to perform this same calculation in a matter of seconds, minutes, or hours. For this reason, quantum computing has the potential to create significant disruption in data security across all public and private industries.

Unlike traditional computing's use of a binary system, quantum computing video fileOff-site link uses quantum bits, or qubits, as the basic unit of quantum data. Often compared to the physics theory of Schrödinger's cat, where the cat can be simultaneously alive and dead, qubits can have more than one value at the same time, referred to as superposition, where the qubit travels all possible paths at once. In traditional computing, a bit is either a one or a zero. In quantum computing, a qubit can be both a one and a zero at the same time. Qubits and superposition form the foundation of quantum computing and are the source of its never-before-seen processing power.

In the next 20 years, quantum computing capabilities may likely reach the point that 2048-bit RSA encryption is no longer secure, leaving public and private industries exposed. In 2016, the Computer Security Resource Center of the National Institute of Standards and Technology, a division of the U.S. Department of Commerce, initiated work to develop post-quantum cryptography standards. The goal of this work is to develop encryption algorithms that protect systems against attacks from both traditional and quantum computers. Interoperability with existing communications protocols and networks is an additional goal of the Computer Security Resource Center's work.

The potential risks of quantum computing touch all industries, businesses, and consumers, underscoring the need to be informed and risk-aware. Is quantum computing on your organization's information security radar? Are steps being taken to determine your organization's quantum computing risks? Or are we all just holding our collective breath?

August 2, 2021

Ransomware: To Pay or Not to Pay?

Ransomware attacks against high-profile corporate, educational, and governmental entities continue to make the news. What the media often overlook, however, are the continuing attacks against consumers' home networks and devices. Imagine your panic when you turn on your personal computer and you get a message demanding $500 in cybercurrency or gift cards for your tax, banking, investment management, family photo, and other important files that a criminal has encrypted. Do you pay or not?

Law enforcement and cybersecurity professionals almost all say "no.” A March 2021 report Adobe PDF file formatOff-site link from a cybersecurity firm described a study of 15,000 consumer ransomware attacks in 2020 worldwide. In more than half of these attacks (56 percent), the victims paid the ransom—but only 17 percent of those making payment regained full access to their files. Adults 55 and older were the age group least likely to pay a ransom (11 percent), while the 35–44 age group, at 65 percent, were most likely to pay.

Arguments against payment are threefold:

  • It encourages further attacks because the victim has already shown willingness to pay.
  • It rewards criminal behavior and provides funds for additional attacks.
  • It may not result in 100 percent recovery of files.

Those consumers making a ransomware payment do it because they hope the payment will restore their files faster and they'll soon resume normal use of their computer.

As this type of cybersecurity attack against consumers and business continues to increase, education about its process and the defenses that should be undertaken are critical. What is the best way to provide that? Let us know what you think.