Bank robbers have dropped their pantyhose and shotguns and have opted for a more sophisticated weapon: the ‘mole’ — new bank employees who also work for organised criminals.
According to the SAS Institute’s US based fraud strategist, Stu Bradley, who works with some Australian banks on fraud detection policies, local and international criminal groups were planting people into banks in order to gain information about security policies and than bypass them using a method called flash fraud.
The bank “moles” as they are known, establish what appear to be real accounts using details acquired from legitimate customers. Once the accounts are established across multiple banks, the criminals strike and empty the accounts.
Bradley said that in some cases, the criminals will walk away with millions.
“Because the fraud is spread over hundreds of accounts, the banks find it difficult to investigate every theft,” he said.
“When that happens on the inside it does not get publischesed but if it is similar to other countries I would imagine there are similar instances where it is happening in Australia.”
While Bradley was reluctant to name specific groups, he said there have been cases where criminals that would have used violent methods in the past, such as motorcycle gangs, have become more sophisticated.
“When you look at the level of reward that you can do as an organised entity, when you can infiltrate a bank and commit fraud versus robbing a bank it is much higher from a fraud perspective,” he said.
To combat this, he said that banks would be forced to use modelling and predictive techniques that will allow them to do a better job of flagging where fraud risks may come from.
According to Bradley, the problem has grown as banks hire in the wake of the global financial crisis.
“There are people who are willing to make a quick dollar by joining the bank undercover as a mole,” he said. “However, local banks have been increasing their risk management teams and that will also include their fraud teams.”
Bank customers will also be in the firing line with smartphone applications a target in the future, Bradley said.
“Based on the growth rate in that particular transaction type and the fact that the applications are going to be pushed out into the market place before there is an appropriate level of fraud protection over that area, I would see that as the next area the fraudsters will hit due to the sophistication of the applications that are out there,” he said.
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