Payment fraud (i.e. unauthorized or deceptive use of stolen payment information to obtain money, goods, or services) remains a major challenge for financial institutions. As the use of faster payments has increased and become more mainstream, so have fraud-related problems.
Fraud techniques are evolving rapidly, often outpacing even the most diligent security measures. Based on industry insights, around 59% of businesses acknowledged an increase in payment fraud cases in the last year. FaaS, or Fraud-as-a-Service, is gaining traction. It involves criminals selling tools and services, making fraud more advanced and sophisticated. The loss connected with payment fraud continues to be massive, both in immediate cost and future losses to reputation.
Consumers are increasingly targeted by scammers, who rely on heightened emotions to create fraud opportunities. Customers are falling victims to scams such as social engineering, phising, vishing, romance scam, pig-butchering scam, purchase scam, impersonation scam. Additionally, there are some organisational fraud trends impacting the ecosystem. Supply chains and third-party services are increasingly targeted with campaigns designed to maximise the impact of a single breach. AI has been increasingly adopted by fraudsters, allowing them to identify vulnerabilities within fraud controls implemented by banks. Authorized payment frauds continue to pose a major threat. Ransomware cases have also increased significantly. With new regulations requiring banks to compensate fraud victims, fraud prevention has become a top priority.
Is your bank's fraud strategy future-proof? To combat payment frauds, financial institutions can implement several countermeasures, including:
- Customer Education and awareness
- Behavioural biometrics
- Risk based approach leveraging AI/ML
- Collaboration through sharing of intelligence on fraudulent transactions, tactics employed by scammers
- Implementing Strong customer authentication through passkeys, biometrics, 3DS
- Practising basic cyber hygiene
Learn this and more! Attend the American Banker Webinar for an insightful conversation. Our panelists will share real-world experiences, best practices, and innovative solutions to safeguard digital transactions and enhance your fraud prevention strategy.
