In the age when malware and man-in-the-you-name-it (middle, browser, computer, etc.) attacks are laser focused on small business bank accounts, the best case is a solution that most regional and community banks can't afford. "Banks need to integrate their Web banking platform with their fraud management systems," says Robert Pavich, vp of fraud prevention solutions at Digital Resolve. "But few regional or community banks have the IT resources to achieve this integration."
Digital Resolve's Analysis Engine offers regional and community banks alerts about suspicious transactions every 10 minutes. "For most online banking transactions, such as ACH transfers, a 10-minute time-lag is acceptable, as the bank still has to perform back-office checks before authorizing the transaction," says Pavich.
A top 50 U.S. regional bank, which declined to be named, recently implemented Digital Resolve for its 500,000 retail and cash management customers. The result? Less than 10 suspcious transaction alerts per day, and several blocked attacks.
Because Analysis Engine is an appliance that's not integrated into the institution's Web banking platform, implementations can be fast-tracked. The key to the product's success, Pavich says, is a hybrid approach that combines predictive analytics with behavior analysis and rules created for each account type. Analysis Engine captures an online banking session and breaks it down into a series of sequential events, which it analyses using a set of rules established by Digital Resolve and its individual clients. These rules are regularly updated as new fraud attacks are revealed. Analyst Engine also uses historic data about a customer's online banking activity as a yardstick for checking current transactions and deciding whether to issue an alert. "Rules-based Web fraud prevention is a good solution for banks that don't have 'rocket-science' fraud problems," says Avivah Litan, vp and distinguished analyst at Gartner.
The product, released last fall, is the result of a Digtal Resolve's 2007 buy of Cydelity a company whose software monitored online banking sessions for suspicious transactions. Digital Resolve's IP geolocation technology was originally developed by its parent, Digital Envoy, for online marketing. The technology enables Analysis Engine to collect information about online banking users such as their IP address, physical device location and ISP.
"A typical [fraudulenet] scenario is the creation of a new payee, the initiation of a transfer to that payee, and the subsequent deletion of the payee file," says Pavich. "This suggests someone trying to cover their tracks. It's even more suspicious if the computer used to create the new payee and make a transfer has a different IP address or operating system to the PC normally used by the customer."
Separately, U.S. cash management software vendor Fundtech Ltd. recently licensed Analysis Engine for its CASHplus platform. Fundtech is using Analysis Engine to offer fraud detection and investigation and forensics tools to its clients, Pavich says.