Leading fraud and detection expert with Norkom Technologies, Dena Hamilton, has today warned global financial institutions to put in place appropriate technologies and procedures to protect their organizations from an ever-rising tide of payments fraud. Hamilton's advice comes hot on the heels of new research published by Norkom, which confirms that payments fraud now ranks as one of senior management's top two fraud concerns.

Hamilton, who joined Norkom in early 2010, compares these empirical results to anecdotal evidence observed in the field which suggests that payments fraud is becoming a seriously hot issue for financial institutions. ?Payment channels are coming under increasing levels of attack compared to other verticals due to the ease with which they can be infiltrated and funds successfully siphoned. Over the last 10 months, we have witnessed a surge in demand for our payment fraud management solutions, as financial institutions attempt to stem the hemorrhage of financial losses from their organizations,? she says.

Findings from Norkom's research, which was conducted among 162 financial crime and compliance professionals worldwide, also indicate that while the level of fraud attacks have reduced slightly over the past year, the financial losses associated with these attacks has risen considerably, directly impacting on financial institutions' bottom lines. This is strongly indicative of the fact that fraudsters are becoming more targeted in their attacks on global institutions. However, on a positive note, the findings also point to the availability of increased fraud budgets, with 47% of financial institutions expecting their fraud budgets to increase over the next 12 months, compared to just 21% reported in 2009.

In explaining the impetus behind this phenomenon, Hamilton claims that payments fraud is being fuelled by the current climate which sees financial institutions competing to deliver ever more convenient and cost-effective ways for customers to make payments electronically. ?The problem of payments fraud arises due to an inherent imbalance between new product development and risk management,? explains Hamilton. ?As financial institutions vie to achieve market share in the proliferating world of new payment channels by rapidly introducing newer, quicker and cheaper ways of making payments, risk management inevitably lags behind, leaving a gap which is being exploited by unscrupulous, well-funded, well-managed organized criminal gangs. Financial institutions need to identify these gaps and close them before they are targeted.?

?A lot of financial institutions are coming to market looking for electronic payments fraud solutions to help them manage this ceaseless problem. Payments fraud is not going away. If anything it will get worse with the continued proliferation of mobile banking – a double-edged sword that will deliver as many conveniences to fraudsters as it will to customers to conduct banking transactions, whether fraudulent or legitimate, from the comfort of their mobile phones. The only way to manage it is to protect against it by putting in place the necessary market-leading technologies that will bolster institutions' defenses. And there's no better time to do it than now – when fraud budgets appear to be recovering from the cuts of last year,? concludes Hamilton.

Norkom has recently launched a new research campaign, spearheaded by Hamilton, designed to identify the size and particular pain points of the growing electronic payments fraud problem for world-leading financial institutions. The results of this research will be presented at the BAI Payments Connect conference and expo taking place in Phoenix Arizona on 7-9th March 2011. To participate in this survey, please email marketing@norkom.com.

About Norkom Technologies (www.norkom.com)

Norkom Technologies is a leading provider of financial crime nad compliance software solutions to the global financial services industry. Its solutions enables financial organizations to take intelligent action, control defenses, and evolve strategies against fraud, money laundering, and other types of financial crime. By combining a unique investigative technology platform with deep domain expertise, Norkom has established a solid track record of reducing financial losses, protecting users' reputations, improving operational efficiencies, and lowering the cost of information technology.

Norkom Technologies
Fiona McLoughlin, +353 1 873 9600
Global Marketing Manager
fiona.mcloughlin@norkom.com