ATM / POS Fraud , Card Not Present Fraud , Fraud Management & Cybercrime

ABA's Doug Johnson on Smaller Banks' Fraud Concerns

POS Fraud, ATM Skimming Hit Community Banks Hard

Upticks in point-of-sale fraud and surges in ATM skimming are hitting community banks hard, says Doug Johnson of the American Bankers Association.

See Also: Scams & Mule Defense: Real-Time Scam Prevention and Advanced Money Mule Detection

Johnson, who oversees cybersecurity efforts for the ABA, says 75 percent of the fraud affecting community banks is linked to POS fraud at merchant locations, according to the ABA's most recent Deposit Account Fraud Survey.

"If you look at all of the various types of fraud that you have across financial institutions, that fraud at the point of sale is something that essentially community banks are seeing to a greater degree, in terms of the proportion of the overall fraud they're seeing," Johnson says in this video interview with Information Security Media Group. "That's not what happens in the large financial institutions."

Looking ahead to the next year, Johnson says increasing attacks against ATMs also are expected to plague community banks. The EMV fraud liability shift date for ATMs is not until October 2016 for MasterCard and October 2017 for Visa, and fraudsters will increasingly target ATMs until EMV is completely rolled out, Johnson predicts.

"What we've seen is a migration of fraud, to not just ATM skimming, but physical crimes against customers at ATMs and physical crime against ATMs, where ATMs are essentially taken," he says. "In July, we're going to extend the database we call ABA Bank Capture, which captures the bank robbery data, to [include] ATM skimming. And we're going to very aggressively market that to the community banks. ... We believe, because ... EMV is coming to the ATM, there is going to be some escalation of skimming over the course of the next year and a half."

In this interview at ISMG's recent Washington Fraud and Breach Prevention Summit, Johnson also discusses:

  • Why retail breaches remain top-of-mind for community banks;
  • Why information sharing among ABA members about emerging ATM attacks is so critical; and
  • How the recent wire fraud schemes waged against SWIFT transactions are going to affect bank security practices.

Johnson leads the ABA's enterprise risk, physical security, cybersecurity, business continuity and resiliency policy and fraud deterrence efforts. He represents the ABA on the Financial Services Sector Coordinating Council, which advises the federal bank regulatory agencies on homeland security and critical infrastructure protection issues.

About the Author

Tracy Kitten

Tracy Kitten

Former Director of Global Events Content and Executive Editor, BankInfoSecurity & CUInfoSecurity

Kitten was director of global events content and an executive editor at ISMG. A veteran journalist with more than 20 years of experience, she covered the financial sector for over 10 years. Before joining Information Security Media Group in 2010, she covered the financial self-service industry as the senior editor of ATMmarketplace, part of Networld Media. Kitten has been a regular speaker at domestic and international conferences, and was the keynote at ATMIA's U.S. and Canadian conferences in 2009. She has been quoted by, ABC News, and MSN Money.

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