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In an era where fraud is evolving by the hour, retail banks are experiencing an increase in total fraud value and volume.
FREMONT, CA: Fraudsters are keen on committing more frequent, more tech-savvy financial fraud; they can teach many people how to be fully dedicated to your work. The fraud scenarios that have increased include identity thefts, account takeover (ATO), card not present, and authorized push payments scams. With more fraudsters gaining ground every year by leveraging the same cutting edge technology, the payments industry uses to tackle fraud. The main question here is that in this one-step forward, on-step-back scenario, how can banks and payment processors thwart bad actors and lessen their continuous attacks.
Here are the three fraud trends to be prepared for in 2020.
SMS spoofing – SMS spoofing is a tactic used to commit APP fraud. SMS spoofing utilizes technology to impersonate a trusted party like a PSP as the sender of an SMS message. The victims receive messages that appear to be from their banks but, in reality, are from fraudsters and act out instructions believing to be from their PSP.
Social and voice banking – Banking channels, like social and voice banking, develop new avenues for automated payments. Although these new channels' convenience is visible, the registration processes for these services are still relatively weak with known loopholes. Financial criminals can be the unintentional winners in the race to create exceptional customer experiences.
Deepfakes and voice biometrics – The use of facial recognition to unlock cell phones and using voice biometrics to command smart home devices generate Jetson-era excitement until criminals get their hands on them. Here enter deepfakes, which are AI-created fake images, videos, or audio manipulations. Expect criminals utilize deepfakes to target the C-Suite and PSP's authentication procedures to commit financial fraud.
Institutional disruption – Fraudsters' main aim is to create massive-scale campaigns that cause disruption. They can use events like bank mergers or Brexit as reasons to ask the customer to revalidate credentials or update settings. This angle applies both to social engineering and collecting customer data for ATO attacks. As we see more mergers and government changes, expect a rise in linked fraud attacks as well.
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