Security measures such as one-time passwords and phone-based user authentication are no longer enough to protect online banking transactions against fraud, according to a new report from Gartner.
Increasingly, such measures are overwhelmed by online criminals looking to pillage bank accounts using valid login credentials stolen from customers, the report said.
Going forward, banks need to quickly implement additional layers of security to protect their customers from falling victim to online fraud, said Avivah Litan, Gartner analyst and the report's author.
Gartner's warning comes amid a sharp uptick in fraud involving the exploitation of valid online banking credentials. In August, NACHA- the Electronics Payments Association issued an alert, warning members about attacks involving the theft of online banking credentials, such as usernames and passwords mostly from small- and medium-size businesses. Cybercriminals used the stolen credentials to take over corporate accounts and initiate unauthorised transfers of funds via electronic payment networks, NACHA said in its warning. NACHA, with more than 11,000 financial institutions as members, oversees the Automated Clearing House (ACH) electronic payments network.
Just a few days earlier, a similar alert was sent to members of the Financial Services Information Sharing and Analysis Center. The alert identified organised cybercrime groups in Eastern Europe as predominantly responsible for illegally siphoning millions of dollars off corporate accounts and sending the money overseas via popular money and wire transfer services.
Last month, the FBI's Internet Crime Complaint Center noted that as of October, cybercrooks had attempted to steal approximately $100 million from US banks using stolen log-in credentials. On average, the FBI is seeing several new cases opened each week, the complaint center said. In most instances, the crooks used sophisticated keystroke logging Trojan horse programs to steal login credentials from company employees authorised to initiate funds transfers on behalf of the business, the FBI noted.
According to Litan, several Gartner banking clients have reported being victimised or targeted by attacks involving the use of malicious code hidden in web browsers to intercept and corrupt banking transactions.
In some cases, the Trojan program lurks in the user's browser and is activated when the user logs into a banking site. The malware copies the user's ID, password and one-time password and immediately uses them to transfer funds, while the victim gets an error message on the computer screen. In other cases, a Trojan program might intercept a transaction that is taking place between a bank and a customer, and change the transaction without either the user or the bank knowing what is going on, she said.
For instance, a request to transfer a certain amount of money from one account to another could be modified so that the request the bank gets would be different from the request sent by the user. However, when the bank asks the customer to confirm the transaction, the details of the transaction would appear to the user to be the same as the one he had requested, Litan said. "The malware is changing what the user sees. So even if you put in a one-time password, you are confirming the wrong transaction," she said.
In instances where a bank might use a phone-based, "out-of-band" authentication system, criminals are increasingly using call forwarding so that it is the fraudster rather than the legitimate user that is being called by the financial institution, Litan said.
"Trojan-based, man-in-the-browser attacks are circumventing strong two-factor authentication, enabled by one-time password tokens," Litan wrote in her report. "Other strong authentication methods, such as those using chip cards and biometric technology that rely on browser communications, can be similarly defeated," she said.
Dealing with the threat will require additional layers of security around online transactions, Litan said. Because any authentication method that relies on a browser can be attacked and defeated, banks need to start using server-based fraud detection to monitor transactions for suspicious behaviour, she said. The goal should be to monitor login, navigation and transaction activity to spot any abnormalities that might suggest an automated program is accessing an application rather than a human being, she said. One European bank using such monitoring technology discovered that once a Trojan breaks into an account, it generates transactions at much higher speeds than a human does, - one second to enter a money transfer amount and press 'OK' compared with 20 to 30 seconds for a human.
Fraud monitoring tools also need to be used to verify that any transactions being initiated by a user fit previous usage patterns and are not significantly different from that user's profile, she said.