Lloyds Bank turns to software start-up to build cyber defences

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Cyber-security start-up, Callsign is helping Lloyds Banking Group to meet approaching antifraud laws with new digital identification and authentication software. 

The new tech is being brought in to satisfy the EU’s Second Payment Services Directive which comes in on 19th September. The law will require most online payments over €30 to pass through extra verification channels, such as submitting a code sent to a user’s smart device.

Last month, financial institutions were told that the new directive would cause the failure of up to 25% of online payments, because new payment infrastructures have not yet been tested, and smaller companies are still lacking the required technology.

The software provided by Callsign uses multiple real-time data transactions instead of passwords to help confirm an individual’s identity.

Relying on AI innovation, the programming constructs an image of the individual to learn how they use their smart device. The device being used in an unfamiliar way or location would be flagged up as suspicious. Once activated, alerts could lead to suspicious devices being blacklisted.

Lloyds is investing £3bn in technology initiatives over the next few years as financial institutions worldwide bid to bolster cyber-security while optimising process speeds and user experience.

Callsign’s approach will enable customers to access their accounts with just one swipe of their phone’s screen. Lloyds may bring in the technique for their own customers as the group bids to stay competitive within an industry being driven by new digital banking disruptors such as Monzo.

As reported by the Financial Times, Callsign’s chief executive, Zia Hayat, said:

“Our solution will enable the bank to go even further in maintaining a premium customer experience when it comes to identification, traditionally a challenging thing to achieve.” Callsign already has deals with banks and other institutions to identify staff online without the need for time-consuming two-factor authentication.

 


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