06 March 2008

Dubai: Banks in the UAE have undertaken strict security measures ever since fraudsters stole millions of dirhams from ATMs here in 2003. But no system is foolproof and there is a constant battle between financial institutions and thieves to gain the upper hand. We speak to security and banking expertise to see what measures they are undertaking to safeguard your money and future

The latest attempt to hack an Automated Teller Machine (ATM) at a bank branch and steal customer data is a reminder of how vulnerable bank customers are to these attempts.

Although the bank was quick to detect the attempt and managed to minimise the damage, one cannot remain aloof, especially when it involves one's money, savings and future.

A group of Malaysian fraudsters stole a few million dirhams from some banks in the UAE in 2003, prompting banks and customers to take extra precautions.

Before the banks had realised what was going on, millions were siphoned off from some accounts.

That was the first major exposure of local UAE banks to skimming, a hi-tech method with which thieves access one's personal or account information from credit or ATM cards, driving licence or even passport.

Last year, a similar attempt was foiled before the skimmers could succeed, although they did manage to steal vital customers' data, prompting a stronger public appeal to strengthen banking security in the UAE.

Although the losses were minimal, the risks remain strong.

"In 2003, advanced security solutions to prevent such theft or fraud were not available to the banks in the UAE. But now they are," Danny Chew, regional director of Hong Kong-based RCG Group, which offers biometric solutions for ATM skimming, told Gulf News.

"Although biometrics, including fingerprint, iris scan as well as radio-frequency identification (RFID) solutions are currently available, most banks have not yet incorporated these solutions into ATM machines."

Some of the banks have, however, installed anti-skimming devices on ATMs, sources say.

"Thousands of bank customers in the UAE are still under constant threat of various forms of fraud, including skimming, which has become a common form of theft. Advanced security solutions are available to prevent these and I don't see any reason why the banks won't install the latest solutions," Chew said.

The company recently opened its regional office in Dubai to serve its customers closely.

Banking officials, however, say that skimming has largely remained minimal.

"ATM skimming in the UAE, I would say, is minimal," said David Horton, head of Information Security at Mashreqbank, one of the victims of the 2003 fraud.

"The incident in 2003 led to banks tightening the security against anti-skimming at the ATMs. So instances are low. Mashreqbank regularly assesses the security of our ATMs and is always trying to improve security for our customers. Security is an evolutionary and holistic process, and we are always looking at what new technologies are available to protect us against fraud."

Skimming is costing consumers billions of dollars in worldwide losses as most ATM cards are secured only through personal identification (PIN) numbers.

Dubai's booming economy has created a profitable business environment for foreign investment. "This leads to increasing demand for premium and secure banking services that both local and international banks are striving to pioneer in the sector," Danny Chew of RCG Group said.

The private wealth in the GCC states is estimated at $1.5 trillion, according to International Islamic Finance. Of this, $400 billion is managed by international institutions and $250 billion is with Islamic entities.

The UAE added 9,100 new millionaires in 2006, taking the total number to 68,100, while the Middle East had 300,000 with combined wealth of $1.2 trillion, according to data from the World Wealth Report produced by investment bank Merrill Lynch and consulting firm Capgemini.

A significant number of residents among the UAE's 4.5 million population hold bank accounts.

Biometric or RFID solutions

Despite repeated skimming attempts, most banks in the UAE have not yet installed the latest biometric or RFID technologies in improving security, leaving the customers' further exposed.

Consumer research commissioned by LogicaCMG, a major international force in IT and business services, and conducted by independent research company Vanson Bourne in 2006 revealed that the introduction of biometrics could lead to much greater consumer confidence when switching between different bank accounts and other financial products, for example.

The research found that on average, 57 per cent of people would be more likely to change their current account provider if all it took was an identity card and fingerprint to establish their identity.

"Regional interest in the potential of biometric technology is rising, as both organisations and consumers look for more comprehensive security and enhanced identity protection, according to one of the pioneers in this advanced field," a recent LogicaCMG release said.

Biometric electronic identity solutions - which are used to automatically identify or verify someone's identity based on physical or behaviour characteristics - are increasingly in demand across a broad range of industries.

The number of pilot and initial implementations of biometric technology in the Middle East has increased in recent months, with biometric processes being incorporated into national identity schemes, border controls and airport immigration gates.

Tim Best, director of Global Identity Solutions, LogicaCMG, said: "Biometric technology can play a key role in providing physical access to buildings and vehicles to legitimate users, offering remote identification for people shopping online and even protecting the users of automated teller machines.

By Saifur Rahman

© Gulf News 2008. All rights reserved.