Academic journal article ABA Banking Journal

Meeting the Challenge of Identity Theft: Opportunity to Build Trust and Create a New Revenue Stream

Academic journal article ABA Banking Journal

Meeting the Challenge of Identity Theft: Opportunity to Build Trust and Create a New Revenue Stream

Article excerpt

Identity theft is a problem that is top of mind for many bankers and an obvious worry for customers. But is there more that banks can do to fight identity fraud? Panelists joined ABA Banking Journal and LifeLock Business Solutions at a roundtable to discuss trends in identity theft and banks' role in fighting fraud.

The banks gathered at the roundtable that offer identity theft protection have found it to be a natural offshoot of their current suite of products. Some of them are charging for the protection, while others are providing it to customers free of charge. All agree that identity theft protection is not only the right thing to do, but is also a way to deepen customer relationships.

Offering identity theft protection has regulatory and operational challenges, however. Panelists discussed how to comply with regulatory pronouncements surrounding outsourcing functions and services to third-party providers, as well as the type of due diligence that regulators require.

Perhaps most interesting were the conversations about how identity theft protection offered by banks can help restore the trust that customers have in the financial services industry. The good news is that with a bit of education, customers "get it." They understand that identity theft is rampant and that everyone is at risk. And with understanding comes appreciation that their bank is looking out for their best interests by offering products that can keep them from harm.

Here are brief introductions of the roundtable panelists:

Ted Awerkamp, chief operating officer, First Capital Bank of Texas, Amarillo, Tex. Fifteen year-old First Capital Bank of Texas is a $730 million institution.

Lucy Griffin, senior associate, Paragon Compliance Group, Washington, D.C. A compliance consultant for the past 20 years, Griffin also was a regulator and managed ABA's compliance division.

Jackie Silverstein, senior vice-president, director of bank operations, Savings Institute Bank & Trust, Willimantic, Conn. The $980 million bank recently became a $1.5 billion institution following an acquisition.

Eric Warbasse, senior director, Enterprise Sales, LifeLock, Tempe, Ariz. Prior to joining LifeLock five years ago, Warbasse spent eight years in technology sales and marketing with Lenovo Group and Insight Enterprises.

Ben Mendelsohn, vice-president, senior retail product manager, Fifth Third Bank, Cincinnati, Ohio. Identity theft protection is one of the product lines that Mendelsohn oversees for the $126 billion bank.

Rick Arthur, vice-president, marketing product director, Union First Market Bank, Richmond, Va. One of the largest community banks in Virginia with $4 billion in assets, Union recently announced an acquisition of $3 billion Stellar One Bank.

Kim Syrop, senior vice-president, fraud mitigation and loss management, Webster Bank, N.A., Waterbury, Conn. Webster Bank provides a full range of commercial and retail banking services to customers from metro New York City to Boston, Mass. Founded in 1935 in Waterbury, Conn., Webster has grown to more than $20 billion in assets.

Panel moderator was Bill Streeter, editor and publisher, ABA Banking Journal, New York. Streeter became the magazine's editor-in-chief in 1987 and added the publisher role in 2012.

What follows is an edited report of the panel's lively discussion.

What identity theft activities are you most concerned about?

Kim Syrop, Webster Bank: There are several. Account takeover attempts concern me the most. Crooks are using malware, pretext calling, and other creative methods to try to gain access to customer accounts. New products, such as mobile banking and remote deposit capture, are inherently riskier than more traditional products.

Crooks are creative, and fraud evolves by the hour.

We also have seen more fraud attempts resulting from compromised credit reports. …

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