Mobile phones, GPS and bank fraud
Posted on June 23, 2008 by Chris DeBrusk
I do a lot of consulting in the financial services space and I had occasion last week to listen to a number of firms talk about fraud and fraud detection at a mini-conference. Then today I spotted a Wired blog entry talking about a fairly major ATM fraud action against Citibank where some hackers apparently got a hold of compromised ATM pins and went on a cash withdrawal spree.
Now that the new iPhone has GPS (not that many other phones haven’t had this service for awhile but I pay attention to the features of the one in my pocket), I was thinking that location aware mobile phones might offer a rather unique mechanism for banks and credit card companies to reduce fraud. Since your phone knows where you are, it would be able to tell your financial institution’s computers your location every say, 15 minutes, and they could use that information to figure out whether the credit card charge or ATM withdrawal that just occurred (or is in progress) is within a reasonable distance from where you happen to be. If not, treat it as likely fraud.
Now this opens up some interesting privacy issues but our banks know so much about us already, for your average law abiding citizen is their location history more important than protecting themselves against fraud? Even better if the bank’s systems only recorded your location just before and after a transaction and discarded everything else.
Alternatively, your bank’s computers could tell your phone in real time whenever a transaction occurred on your account and the GPS coordinates where it happened. Then you could quickly check to make sure it was where you (or your spouse) happened to be.
Lots of things would need to be figured out to make this work but those that protect our money should likely be able to confirm that it is in fact being spent by us and not someone else. Especially since they seem to have trouble protecting themselves from hackers sometimes.
Sphere: Related Content» Filed Under Mobile Platforms, Uncategorized
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