On Monday 21 November in London, Digital Trust World 2022 brought the digital trust community together to discuss the latest developments in digital onboarding, digital identity, authentication & privacy, and fraud management.
Leading the fraud management session, was Clare Messenger, Head of Fraud Protection Services at JT International.
Clare led a panel of fraud experts from UK Finance, Cifas, Vodafone and FICO to discuss how the industry can counteract the latest digital fraud threats. Clare shared her thoughts on this important topic in the Digital Trust World 2022 brochure and this is reproduced in this blog post. You can access the full brochure online here.
MANAGING DIGITAL FRAUD
The adoption of a digital-first approach, that has been accelerated during the pandemic, has led to consumers becoming increasingly accustomed to communicating with businesses and organisations online. While this has created more opportunities to engage with customers, provided us all with greater convenience, and ensured that life continues through times of crisis, it has also created vast opportunity for criminals.
The volume and variety of online fraud predicated by this digital-first approach continues to accelerate at an alarming rate. From identity fraud, SIM Swap/account takeover and smishing, to Authorised Push Payment fraud, pension and investment, and romance frauds, the list goes on.
As our digital footprints have become deeper and more complex, the skill and ingenuity of fraudsters has advanced. Rather than lone wolves gifted with extraordinary skills as its all too often portrayed, digital fraud has become the domain of organised crime. Well prepared teams of fraudsters can be articulate, financially knowledgeable and armed with credible resources. Organised crime groups have brought with them ever more elaborate ways to defraud their victims, including the alarming threat of insiders being recruited, and the use of bribery of vulnerable targets to aid in criminality.
All of this now means that any one of us can become a victim, no matter how technically or financially savvy we may be. This was illustrated in 2019 as fraudsters took control of former Twitter CEO Jack Dorsey’s phone number through a SIM Swap scam. Despite this well documented example of a high profile individual being duped, many people still don’t know just how prevalent SIM swap fraud has become. In the UK SIM swap fraud increased by 400% in the five years between 2015 – 2020, with losses of £10m.
Half of the world’s total population own a smartphone, and two billion of these individuals are using mobile banking. Approximately 87% of all banking customers today use mobile devices as their primary method of accessing services, providing greater opportunity for cybercriminals.
Although online fraud and scams are seen as lower risk alternatives to traditional crime by fraudsters, with the threat of a global recession looming a sharp increase in fraud is expected as more join the fraudsters’ ranks to earn some money.
The data processors and controllers of our personal information need to double down to address one of the most pressing issues of our times. We know that security and control tools are among the top features users say they want in mobile banking apps, signifying that businesses need to find a way to protect their customers against SIM abuse while still providing the best digital customer experience.