Banks’ Biggest Threats In 2016

The Wall Street Journal reported Wednesday (Dec. 30) that a survey of banking experts yielded some predictions of what to expect in terms of risk in 2016. The trio of threats included a few of the usual suspects.

Cyberthievery makes it high on the list, of course. The wrinkle here is that the hackers have been going beyond the mere grabbing of personal data and actually using bits and pieces of data to create entirely new identities, with intent to conduct financial fraud. “A synthetic identity is just a made-up identity, a fabricated ID that then requires additional steps to create the appearance it’s real,” Thomas Brown, senior vice president of financial services at Lexis-Nexis Risk Solutions, told WSJ. “It requires great scrutiny to make sure it is truly authentic.”

[bctt tweet=”Hackers have been going beyond the mere grabbing of personal data.”]

Another expert, Sonya Andreassen-Henderson, vice president of mortgage investigative services at PNC Bank, said that the fake identities go so far as to grab pay stubs and other data, which means hackers can infiltrate legitimate banking services. That translates into fresh and enforced scrutiny even of legitimate applicants. In the year ahead, banks and other institutions will have to devote new efforts and manpower to fighting fraud.

Moving to the next threat, country de-risking will have some sway over banks and the moves they are making in countries they may abandon should it be borne out that risks outweigh business benefits.

Finally, there is the continued fight against terrorism financing, and the fight, in order to be successful, must continue to use data effectively, with a continued dialogue between banks, compliance officers and regulators. The information that will be monitored, of course, will be used (or discarded) to identify individuals who might be deemed to be “high risk” or worthy of further scrutiny. 



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.