We are already halfway through 2020, and we can honestly say that it is not the best of years that we assumed it to be.
While business operations have increased online, industry players and experts fear that fraudulent activities will drastically increase in the coming years. Every year, there are predictions made about the future fraud trends.
Companies and individuals are looking to protect their digital identity and financial fraud risks. However, it is easier said than done.
Companies like Accertify is among one of the top risk managers in the industry who understand the overwhelming and sophisticated threats that businesses are exposed to.
It is important to keep a tab on the potential risks and threats that surround the industry. So, to help you with that, we have researched and prepared a list of top fraud trends that every business should be aware of.
Let’s get started.
1. Account Takeover Methods Will Switch To Next Level
Since the majority of the people are online, the number of digital accounts has increased. Whether it is financial accounts or social media accounts, the activities have increased online.
This has given the fraudsters a chance to manipulate the users and take advantage of them.
Although account takeovers (ATO) are not a new thing, experts fear that there will be an explosion of techniques and methods used to access login credentials.
The worst part is that this issue is bad across all verticals. It is seen that while businesses are spending millions on stopping transaction and chargeback frauds, account takeovers aren’t taken gravely as they should be.
Businesses need to understand that scammers have unlimited access to sophisticated tools to:
- Bypass 2FA, meaning your multiplying authentication methods aren’t safe as they once were
- Scrape for ATO
Even the best practices of using 2FA are vulnerable to phishing attacks.
2. Phishing Will Evolve Dangerously
Individuals and businesses are losing valuable assets without giving away passwords. This is a sign that there is an increase in phishing fraud techniques.
Experts warn that if serious measures aren’t taken soon, it is only going to evolve dangerously. Scammers are tricking businesses into transferring huge amounts of money to non-existent suppliers.
Moreover, there have been reports of a dedicated phishing scheme targeting Microsoft Office 365 users.
According to experts, the attackers are accessing data stored in the cloud by using a malicious link to drive the users to the real login page.
Those who fail to identify the malicious link give the attacker straight access to all the company cloud data, including financial information, contacts, files, and emails.
The worst part is that even if the user changes the password, the attacker can still access the system. That’s how dangerous phishing attacks are.
According to industry experts, individuals and companies need to make sure that they are vigilant all the time to prevent unknowingly, giving away any information that could harm their company or personal lives.
3. Open Banking And PSD2 Will Continue To Transform The Online Landscape
In the category of the latest worrying fraud trends, it is predicted that open banking will continue to transform the online landscape, which will allow the fraudsters to exploit the lack of consumer awareness.
Financial institutions and fintech companies were the first domains to feel the modifications introduced by the European Union’s PSD2 (second Payment Services Directive).
However, during the first quarter of this year, the world witnessed a complete transformation of the e-commerce domain. This is because strong customer authentication (SCA) is rolling out across Europe.
As a result, it is creating a period of consumer confusion. Since new services are OTP (one-time-password)-based, which is instigated through MFA, 2FA, SMS, and even mobile app-centric biometric authentication, scammers are trying to exploit the lack of consumer awareness to fool the users into unintentionally providing valuable information.
As most of these techniques are still new to some of the users, it is often fruitful for the fraudsters because they can easily manipulate them into submitting data.
Moreover, experts believe that scammers are also abusing techniques like Pin, Chip, and Captcha forms for malicious activities.
Irrespective of all the vulnerabilities, fintech firms, and banks are enthusiastic about the new possibilities of open banking. According to a report, financial institutions want to encourage fintech app development via open banking.
Fintechs, on the other hand, is welcoming the opportunity of scaling and growth by partnering with renowned banks and financial institutions. All the fintech sector wants is brand recognition that an established bank can easily provide.
While new security measures promise to enhance safety, it is increasing consumer confusion. As a result, people and businesses are becoming prone to data breaches and susceptibilities.
As a business owner, it is important for you to take all the precautionary measures so that your business won’t suffer at the hands of fraudsters.