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Middle East's Second Annual Online Security Survey Results Announced by ReadiMinds

State of Online Security in Financial Institutions in Middle East - 2009

[Online fraud is borderless.
ME Financial Institutions need catching-up!
Increasing concerns over inconvenience of Hardware Tokens!
Software 2FA demand rising!]

Singapore. December 21, 2009.

ReadiMinds is pleased to announce the results of its second annual Middle East online security survey titled "State of Online Security in Financial Institutions in Middle East - 2009". Survey* respondents represented a cross section of Middle East's major banks. The survey primarily focused on the issues pertaining to transaction security, online financial fraud prevention and real-time risk mitigation.

Key findings of this survey are:

  • 75% of respondents rated their own financial insitution's ability to counter online security threat as "average".
  • Internal frauds remain major source of concern in the middle east region. External frauds however are the fastest growing area of online fraud.
  • Almost all respondents reported that their financial institutions were victims of online fraud(s) during the year.
  • Increasing concerns raised about the inconveninence of hardware tokens. New "Software 2FA" technology namely device finger-printing is increasingly attracting attention [similar to Asia, India and other parts of the world], due to its effectiveness, convenience and lower cost.
  • ME financial institutions are still taking "piecemeal/fraud-wise/channel-wise" approach to tackling online frauds, as opposed to taking holistic financial crime surveillance approach across channels. However, 50% of respondents showed strong desire to implement enterprise wide holistic cross-channel financial fraud prevention moving forward.
  • Over 70% of respondents preferred "real-time" fraud detection & prevention as opposed to traditional "cooling/review period" based approach.
  • Over 75% respondents claimed to have known that an integrated multi-layered security consisting of stronger user authentication, cross-channel fraud detection [& false positive reduction] and risk-based transaction authorization is the strongest form of defence against identity theft and online financial frauds - both traditional and emerging ones.
  • 70% respondents rated efforts of their financial institutions to tackle online branch banking frauds as "average".
  • Improper hiring practices, easy access to technology/systems, and staff dissatisfaction were the top three contributing factors to online branch banking frauds.
  • Unusual transactions on client accounts and authority misuse were two of the biggest branch banking fraud concern by 50% of the respondents.
  • Traditional audit process is still the primary mechanism being used to detect online branch banking frauds.
  • 60% of respondents felt a Real-Time Enterprise Risk Monitoring & Mitigation System, being part of a regulatory and compliance framework, could have helped minimize risk crisis in the financial industry.
  • Over 50% of respondents would like to implement real-time operational risk monitoring & mitigation framework.
  • Over 60% of respondents rated their organization's readiness to tackle trading desk related frauds as "average".
  • Online financial fraud prevention, real-time risk visibility and regulatory compliance are the top most "security and risk" agendas during the year.
  • There is an increasing desire to take a holistic approach to transaction security, that of preventing financial crime across channels across the enterprise.
  • FIs starting to think about the future challenges as well: After implementing "point" solutions that could only tackle limited security challenges for a single channel like identity theft, financial institutions are now realising they actually need a future-safe investment-proof fraud prevention solution that could grow to meet challenges posed by emerging online frauds across channels.

ReadiMinds CEO Naren Nagpal added:

"We have seen marked improvement in awareness of challenges posed by online threats - some of it is probably the result of couple of high-profile regional fraud cases widely reported in the media during the year. It seems the region mostly uses basic channel-wise transaction security primarily targeted for identity theft, as opposed to prevent broader online frauds. It is obvious there exists an excellent opportunity to leap frog and adopt real-time, integrated, multi-layered, cross-channel Financial Fraud Prevention as opposed to doing a catch-up with traditional piecemeal fraud/channel-wise approaches - afterall online fraud is borderless!".

*Note to Editor: Survey was conducted through the web and phone interviews by ReadiMinds - a specialist software company focusing on transaction security and online financial fraud prevention.

Contact for more information, or interview:
Ms. Manjula B A