security procedures for electronic banking

Customers can confirm their password log-in with an additional security code that is texted to your mobile phone or other device – known as “two step verification” or “two factor authentication”. If the bank acts on any of these unauthorized payment orders, the question becomes who should bear the risk of loss for any funds of the customer that cannot be recovered – the customer or the bank? In reaching this decision, the court found the following failures of Ocean Bank's security, when considered collectively, to be determinative: In making this decision, the court also noted that the bank's reliance on challenge questions without implementing additional layers of security was cautioned against by bank regulators and by the third-party vendors that supplied such security software, not common amongst New England community banks in combating the ever-growing problem of internet fraud, and especially unreasonable given the fact that the bank had itself previously been the victim of fraud involving keylogging malware. § 326.4] Subpart B—Procedures for Monitoring Bank Security Act Compliance § 326.8 Bank … These online bank accounts are protected to varying degrees by one or more security procedures (e.g., user IDs and passwords, challenge questions, token codes, risk scoring and monitoring, customer notification, etc.). A sound program should have a physical and logical security and risk awareness program in place. the wishes of the customer expressed to the bank; the circumstances of the customer known to the bank, including the size, type and frequency of payment orders typically issued by the customer; whether alternative security procedures were offered to, but not elected by, the customer; and. electronic transactions between customers and their bank. As a result, the court held that Ocean Bank could be found liable for over $345,000 in losses from Patco's bank accounts caused by fraudulent payment orders placed over a period of seven days by a cybercriminal who used keylogger malware to steal confidential banking information (usernames, passwords and answers to challenge questions) from Patco employees. Several members of your executive team have been threatened. The court also stressed those security measures that were not implemented for Patco's online bank accounts, including, among other things, bank monitoring of the risk-score reports that were generated, and manual review and customer notification of high risk-scoring transactions. Due date: Usually […] Until recently, it appears that customers were largely unsuccessful in bringing such lawsuits. The first line of defense at a bank is the front door, which is designed to allow people to enter and leave while providing a first layer of defense against thieves. Those protections included log-in IDs and passwords, computer tracking cookies, risk profiling and scoring reports, and challenge questions triggered for high-risk transactions or transactions over certain dollar amounts. It remains to be seen to what extent the Ocean Bank and Comerica Bank decisions will be used by other courts to question the sufficiency of a bank's online security procedures and/or hold a bank responsible for commercial customer losses resulting from fraudulent electronic transactions initiated by cybercriminals in circumvention of such security procedures. We invested in the best security, technology and major payment gateways to make deposits and withdrawals and all other banking procedures … that the processing of such fraudulent payment orders comported with reasonable commercial standards of fair dealing (i.e., that the bank's response and processing of the payment orders was in-line with what other similarly situated banks would have done if one of their customers was victimized by a phishing scheme). E-Banking. In theory, these security procedures are intended to provide benefits to both the bank and its customers. Adelphi, MD. Article 4A provides the answer to this risk of loss question. For a customer, the security procedures serve as a safeguard against unauthorized access to and use of such customer's bank accounts and confidential information. What is certain, however, is that the instances and complexity of cybercrime affecting the U.S. online banking system continues to rise at an alarming pace, and the amount of potential losses that banks could be subject to for implementing inadequate security procedures are considerable. An ATM is an electronic communication device and, therefore, the controls … In theory, these security procedures are intended to provide benefits to both the bank and its customers. With this information, these criminals can then attempt to access the customer's online bank accounts and, if successful, initiate fraudulent payment orders for substantial sums of money. July 3, 2012), the U.S. Court of Appeals for the First Circuit found that the security procedures implemented by a New England community bank, Ocean Bank (later acquired by People's United Bank), with respect to the online bank accounts of Patco Construction Company (Patco), a small property development and contractor business, were not “commercially reasonable” within the parameters of Article 4A. BENEFITS/CONCERNS OF E-BANKING BENEFITS OF E-BANKING For Banks: Price- In the long run a bank can save on money by not paying for tellers or for managing branches. Electronic payments are considered to be more secure for a number of reasons, including: • They are secure and encrypted and can be protected with a secure one-time password (OTP) and with multilevel authorisations and approvals. Ultimately, the court ruled that the security procedures used by Ocean Bank were not “commercially reasonable” for the purpose of protecting Patco's accounts. However, since June 2011, at least two federal courts have ruled that a bank's security procedures did not satisfy Article 4A's requirements and, therefore, the bank could be held liable for acting on fraudulent electronic payment orders. There’s been talk about a strike due to the possibility that your organization may be seeking concessions. Many banks and credit unions allow customers to get text and email alerts about certain transactions in their accounts. : 9425086395 ABSTRACT In its very basic form, E-banking can mean the provision of information about a bank and its services via a home page on the World Wide Web (WWW). The term had been defined in many ways by researchers mainly because electronic banking refers to several types of services through which customers can request The Security Procedures agreed upon by the parties for verifying the authenticity of Wire Transfers is the use of a log-in identification code (“User ID”), unique authentication code(s) (“Password”) and Secure Access Code. LEXIS 13617 (1st Cir. CONSUMER AFFAIRS ELECTRONIC BANKING EXAMINATION CHECKLIST This checklist was established by the Electronic Banking Working Group (EBWG) to create a tool for examiners to document reviews of a state member bank’s Internet web site for compliance with applicable consumer protection laws and regulations. Electronic payments Why are they secure? the types of security procedures generally in use by similarly situated banks and customers. 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