News release     Wednesday, 16th June, 2004             safebank 1

Mobile messaging to prevent bank fraud

An innovative solution to make electronic banking safer for customers was launched in Australia today by Spectrum Message Services.

This software helps protect a bank customer against fraud by instantly sending a message about each transaction to his or her mobile phone as the transaction takes place.

So if an impostor uses the customer’s credit card at an automatic teller machine, for example, a short messaging service tells the customer immediately when and where the transaction took place, allowing the customer to contact their bank to stop any further unauthorised transactions.

A director of Spectrum Message Services, Ken Gaunt, said at the product launch in Sydney yesterday, “We feel that the banks embrace new technology like this as it becomes available. We believe banks fulfil their responsibility to offer as much protection as they can to their customers, be they card holders or merchants.”

Gaunt, a former sales and non-executive director and shareholder of Cashcard Australia Limited and former executive of the international ATM Industry Association, was speaking at a seminar to launch the service and explain it to representatives of banks. He introduced speakers representing Teletrade 2000, the developers, and OTP Bank, which has been using the product in Hungary for four years.

He said, “Fraud is unfortunately something that we all have to live with. Banks provide us with the convenience of credit cards, debit cards and internet accounts and this obviously adds to the potential of fraud taking place.

“Our product can help prevent or significantly reduce such fraud. It has been utilised for a number of years by OTP Bank in Hungary and it has dramatically reduced the amount of fraud for card holders of that particular bank.”

Speakers at the seminar included the chief advisor to the CEO and board member of OTP Bank, Peter Braun, the business development manager of Visa International in Australia, Glenn Pitt, and the chief technology officer and business development manger of Teletrade 2000, Stewart Harvey.

Braun told those at the seminar that since OTP Bank began using the software four years ago, the level of fraudulent transactions at the bank had declined dramatically from one of the highest levels of any bank in Europe to the one of the lowest.

He said OTP was using the software in its 440 branches in Hungary and was introducing it to its branches in neighbouring countries.

Those who attended the product launch and seminar included representatives of Westpac, Credit Union Services Australia, Provenco Payments, First Data International, St George Bank, Commonwealth Bank of Australia, HSBC Bank Australia and Mastercard.

Titled “Eliminating card fraud”, the seminar was held at Grace Hotel in York Street yesterday. It included a product presentation and a demonstration of the new service called the SMS Bank Card Control System.

As a demonstration, a representative of SMS withdrew money from an ATM at the Commonwealth Bank across the street and details of this transaction were instantly received as a text message on mobile phones held by participants at the seminar.

Spectrum Message Services (SMS), based in Sydney, offers the service to the banks to not only prevent credit-card fraud but also to allow customers to control their accounts by mobile phone.

The service enables banks to provide an enhanced transaction service without having to invest in expensive changes to infrastructure.

The service notifies the customer of any EFTPOS credit/debit, ATM, MOTO or Internet transaction with their card in a detailed SMS message by mobile phone. This service works real time and irrespective of where the transaction occurs or wherever the cardholder is at any time.

Spectrum says its system is based on the fact that mobile phone networks exist globally and that each payment transaction is routed back to the card-issuing host. So, irrespective of the merchant and the merchant’s acquirer network, as soon as the transaction reaches the host a message is automatically generated.

Usually the customer is notified while the receipt is being printed. If a transaction is fraudulent, the customer can block the card by a simple response to the message or by calling the help desk of the bank.

The customer can also use a mobile phone to receive daily account balances and set daily or one–off transaction limits.

The system runs separate from the issuer’s main authorisation systems and does not impact on the transaction flow or the speed of transactions. It listens, checks whether a card holder subscribes to the service then generates the message and sends it via the global GSM telephony networks to the card holder’s mobile phone. Spectrum says system integration is generally fast and painless for the bank.

A bank may charge customers a monthly subscription per card for the service, charge per transaction or absorb the costs out of savings from reduced fraud and increased turnover.
 

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Media contact: Gerard Vos, Managing Director, Spectrum Message Services Pty Ltd (ACN 106 756 094), 
phone – 99189769; Mob – 0405 379610;