A Report by CYS Global Remit FinTech Development Unit
A concerning trend in the financial services sector is highlighted in a recent LexisNexis Risk Solutions report, revealing a 17% increase in digital fraud attacks in 2023, driven largely by payment fraud and fraudulent account creation.
Human-Initiated Attack Patterns
Globally, human-initiated attacks rose by 8%, with North American financial institutions experiencing a sharp 30% increase. Conversely, the Asia-Pacific and EMEA regions saw declines of 15% and 24%, respectively, indicating varied success with security strategies across different markets.
Automated Bot Activity
The financial sector faces a significant volume of bot attacks, despite a 6% decrease from the previous year. With around 1.8 billion automated attacks constituting half of global bot activity, institutions continue to contend with substantial automated threats requiring ongoing vigilance and advanced countermeasures.
New Account Creation Fraud
New account creation fraud increased by 12%, primarily via mobile channels. Fraudsters are using stolen and synthetic identities to open fraudulent accounts, which are then used to access online services and credit, posing a significant risk to legitimate customers and financial institutions.
Payment Fraud Trends
Payment fraud rose by 9%, with criminals exploiting stolen credentials for unauthorized transactions, particularly in mobile channels and alternative payment methods. Direct deposit systems face increased targeting, reflecting shifts in the financial landscape and necessitating enhanced security measures.
Institutional Implications
Financial institutions must respond robustly, focusing on three key areas:
Intensified monitoring of mobile and alternative payment channels.
Deployment of advanced analytics to anticipate and manage evolving threats.
Enhancing consumer awareness through educational initiatives to build a more security-conscious customer base.
Conclusion
The LexisNexis report highlights the increasing complexity and sophistication of digital fraud in financial services. As threats advance, institutions must enhance their security frameworks to safeguard customers and assets from increasingly sophisticated criminal activities.
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