Siloed authentication and fraud controls: what are teams missing?

TL;DR: Account takeover persists because authentication and fraud prevention still operate in separate systems, leaving institutions unable to connect risk signals across onboarding, contact centres and transactions, according to Alloy. The result is a control gap where step-up, callbacks and monitoring can all pass while an attacker advances through the customer lifecycle.

Editorial analysis by NHI Mgmt Group, based on content published by Alloy: “Authentication failures are fraud prevention failures”.

By the numbers:

• 39% of banking professionals said siloed systems were their most painful authentication challenge, according to Alloy research cited in the article.
• 39% said fraudsters are exploiting the gaps between those silos, according to Alloy research cited in the article.
• 87% of consumers say they would lose trust in their bank if it failed to notify them immediately of a scam attempt, according to Alloy research cited in the article.

Key questions

Q: What breaks when fraud and identity teams work in silos?

A: When fraud and identity teams work in silos, policy decisions diverge, exceptions are handled inconsistently, and no one owns the full trust lifecycle.

Q: Why do cross-channel account takeover attacks bypass normal controls?

A: Because attackers use one channel to prepare another.

Q: How should security teams measure whether authentication controls are actually working?

A: Measure the full path, not just successful login.

Practitioner guidance

• Unify authentication and fraud decisioning Create a shared risk model that combines login, recovery, device and transaction signals before step-up or approval decisions are made.
• Preserve onboarding trust signals Carry KYC data, device fingerprinting, IP reputation and behavioural biometrics forward into later login and transaction workflows instead of resetting context after enrolment.
• Correlate contact centre and digital activity Join call centre resets, credential changes and mobile or web sessions so an apparently valid support interaction cannot clear the fraud view on its own.

Bottom line: Authentication failures become fraud prevention failures when teams cannot share the same view of customer risk across channels.

Explore further

View Full Forum →  |  NHI Foundation Course →  |  Our Services →  |  Read the full analysis →