Today, ClairMail introduced a new mobile fraud alert product that is just one in a series of new products that use the mobile device functions to improve fraud detection on mobile and other banking channels.

Research firm Gartner (News - Alert)-, has forecasted that by year 2013, location information or profile information from mobile phones will be used to validate up to 90 percent of all mobile transactions. The firm also expects that by year 2015, at least 15 percent of all payment card transactions will be validated using mobile location and profile information.

With ClairMail's introduction of its version of mobile fraud alerts, not only can a bank automatically send alerts when a customer's transaction seems peculiar because of unusual behavior or location (ex: you live in New York, but a purchase with your card was made in Guam), but the customer can then respond with a text message that it sent directly into the affected system, letting the bank know within seconds whether the transaction is fraudulent, and respond accordingly by confirming or denying it.

“Whether this will be a killer app or not, this is a great next step for mobile banking," said Carl Tsukahara, CMO, in an interview yesterday. Fraud costs the banking industry billions of dollars a year and fraud incidents continue to grow in the teens, Tsukahara says.

"Data suggest that consumers identify one-third to half of fraudulent transactions today through slow means," such as noticing that something's not right in their monthly checking statements, Tsukahara says. But more immediate alerts are warranted, because about half of fraud losses occur five days after an intrusion, Tsukahara added.

Using this new solution, which works alongside credit card, debit card-, and online banking transactions, customers can choose to manage some alerts on their own, personalizing what activities are allowed. For example, if a customer knows they will never use a specific card to purchase something online, they could opt in to receive an alert every time an online purchase happens. Or they could choose to be sent an alert every time a purchase is made in a country outside where they dwell, or every time an expensive purchase is made on a credit card. The customer can respond to the alert of an online purchase, by simply texting back, "wasn’t me." That message will work as a trigger at the bank, forcing them to deny or cancel the transaction.

Tsukahara says that even if the customer is getting more than one alert at a time, the ClairMail service can compile customer interactions, and turn them into fraud responses through partnerships with banks’ customer channels. Tsukahara would not remark on exactly how this process works, saying it was the "secret sauce."