In recent years, there’s been a push for credit issuers to adopt chip-and-PIN technology to better protect their banking environments from credit card fraud. With mobile payments expected to increase in 2012, financial institutions need to also consider deploying caller authentication solutions that secure the telephone channel from advanced forms of Caller ID spoofing and other social engineering schemes.

In the Credit.com article, “6 Hot Credit Card Trends for 2012,” Beverly Blair Harzog, breaks down the most significant industry trends for the new year. While most of her points revolve around the upswing in credit card use, the one point that hit home with me was No. 6: “Technology rules the future.”

As more and more banks push for smart phone payments this year, technology and the telephone will converge like never before. To protect the telephone channel, banking institutions need to have authentication tools that can validate the growing number of customer transactions that are made over the phone, smart phones included.

With customers leveraging so many banking channels, financial institutions cannot afford to continue operating under the disillusion that traditional identity authentication tools like knowledge-based authentication (KBA) are keeping them safe from harm’s way. The way criminals spoof their Caller IDs and socially engineer bank call center agents today, relying solely on KBA and personally identifiable information (PII) is no longer predictive of identifying who is on the other end of the line. To identify and stop telephone fraud, banks need stronger caller identity authentication that validates each call coming into their contact center.

A customer authentication tool like the TrustID® network-based Physical Caller Authentication solution validates the physical location of the landline or mobile phone before the call is answered, allowing bank call center agents and IVR systems to instantly know whether the call is trustworthy or not, even before it is picked up.

So, with more mobile transactions on the horizon, using Caller ID and ANI as a valid credential for identifying customers over the telephone is becoming a critical part of any bank’s multi-factor authentication strategy. By securing the telephone as a safe way to transfer money, purchase products and share information, TrustID is helping financial institutions reduce fraud over the telephone, improve the customer experience with less intrusive customer interrogation, and deliver faster service at lower costs.