In this ever-evolving digital world, there are corners where fraudsters seek out new and creative ways to exploit. No matter how many times you build the wall back up, they will attempt to find cracks or just knock the whole thing down. So businesses are forced to find new ways to mitigate the risks of fraud, whether internal or external.
We have composed this article together so all businesses alike can try and stay ahead of the game in this new business year, as no one wants to have a fraud recovery case right at the beginning of 2024.
Fraud risk is increased by automation, which makes it simpler for criminals to take advantage of users’ accounts while avoiding detection. Fraudsters can cover more ground by using software or bots to complete tasks that would otherwise require human intervention through automation.
A type of identity theft known as account takeover (ATO) happens when a fraudster obtains access to a person’s or an organisation’s email accounts, computer accounts, and other personal data.
Hackers typically use malware and phishing techniques to obtain authentic user credentials, or they purchase them from the dark web; they then use the credentials they have stolen to take over an account.
Account takeover can consequently lead to a large variety of crimes and financial losses, including but not limited to:
- Bank account takeovers
- Money laundering
- Stealing any loyalty or reward points
- Reselling any information, e.g. subscriptions
Targeted attacks, in which cybercriminals breach a target entity’s entire infrastructure, including its network and computer systems, are another emerging threat. They can carry out these attacks covertly and for an extended period, obtaining vital financial information and inflicting large losses on stakeholders and institutions.
Although there are services from institutions like the government or professional investment fraud attorneys that can help retrieve the funds, this is too much damage that can follow and build up for you to rely on this sort of protection and should only be a last resort when security fails.
Organisations big or small must implement a multi-layered approach to account security to guard against fraudsters. According to the Federal Financial Institutions Examination Council, single-factor authentication techniques are frequently the cause of system attacks, which allow for unauthorised access to accounts and facilitate ransomware attacks, identity theft, and other fraudulent activities.
Institutions that employ multi-factor authentication use behavioural biometrics, device ID, and biometric authentication, among other unique authentication factors, to successfully authenticate their customers and employees.
Cost of Fraud
The entire cost of fraud is starting to become a real concern, including the impact on customer lifetime value, fraud losses, prevention tools and headcount costs. Global fraud losses are estimated to be $5.4 trillion; the University of Portsmouth estimates that fraud causes losses of about £185 billion in the United Kingdom and increases fraud costs for U.S. financial services companies by 9.9%.
What caused the rise? Fraudsters have returned as more and more people shop through online and mobile channels, which has increased fraud losses and the related expenses of combating fraud.