The latest Feedzai Financial Crime Report Q2 2021 Edition which factors in some 12 billion global transactions between January-March 2021, shows that bank fraud is up 159%, including internet, telephone, and branch banking. Card-not-present (CNP) transactions were just 18% of all transactions, but drove 83% of all fraud attempts.
The five most commonly attempted scams were Account Takeover (ATO)-up 47%; account opening identity theft-up 23%; impersonation scams-up 21%, purchase of goods that never arrived-up 15%, and phishing scams-up 7%. A cyber and passwordless authentication expert with Veridium offers perspective.
<p>The recent Feedzai report confirms several points regarding the industry’s hypotheses on financial fraud. First, as transaction volumes reach all-time highs, banks and insurance companies should brace for higher fraud volumes and proactively bolster their risk processes and customer identity and access management systems.</p> <p> </p> <p>Second, fraud vectors should be increasingly assumed to be multi modal as bad actors will often exploit channels with weaker Know Your Customer (KYC) verification processes such as telephone banking or contact center, as seen by the high surge in fraud attempts from these channels. Sometimes even bank card fraud via traditional mail can manifest within the branch and digital channels for impersonation and Account Takeovers (ATO) scams.</p> <p> </p> <p>Third, various forms of phishing, social engineering and Man-in-the-Middle (MITM) attacks can be highly effective at overwhelming a vast majority of conventional safeguards currently in place by the financial institution.</p> <p> </p> <p>Organizations and users should aggressively embrace passwordless authentication methods to establish a strong un-phishable relationship between the user’s designates authenticator and the bank‘s systems. As identity becomes the new perimeter, Strong customer authentication solutions such as phone as a token and FIDO2 security keys are increasingly gaining popularity. Also, such authentication methods offer lower friction and can improve user experience and productivity.</p>