SECURITY SOLUTIONS

NICE Actimize ’ s in-depth research showed that the rise of banking fraud is a growing concern for Financial Institutions ( FIs ) and consumers alike . Fraudsters are becoming increasingly sophisticated , shifting their tactics from traditional account takeover and unauthorised fraud to more complex authorised payments fraud ( scams ). This not only complicates the fraud threat landscape but also puts FIs at risk of double loss scenarios – both first-party and third-party victims .

The report indicated that from 2021 to 2022 , attempted fraud transactions skyrocketed by 92 % and attempted fraud amounts soared by 146 %. This alarming trend highlights two key points : first , there is a dramatic increase in overall transaction volumes and second , fraudsters are becoming bolder and targeting higher fraud amounts . The report also stated that fraud is not limited to one specific channel ; it ’ s a complex , multi-channel threat that is shaped by Digital Transformation , changing consumer behaviours and shifting fraud patterns . The report also estimated that the absolute amount of attempted authorised payments fraud overtook account takeover fraud amounts with a 45.9 % year-over-year increase from 2021 to 2022 .

“ Fraudsters are leveraging faster payments innovation to conduct sophisticated scams involving money mules who transfer funds away from the FI – funds that are often unrecoverable ,” said Craig Costigan , CEO , NICE Actimize . “ As the digital landscape evolves , so do fraudsters ’ tactics . The threats identified in our report are a glaring reminder of the ever-present risk that looms over digital channels and payments . Financial institutions must fortify their defences and review digital channel controls to stay ahead of new and emerging threats .”

As the world moves towards a cashless society , the volume of transactions is increasing and so too is the amount of fraud across all channels and typologies , including online , mobile and in-person transactions . NICE Actimize ' s research sheds light on this pressing issue and highlights the need for layering in cutting-edge technologies like Machine Learning ( ML ) and Artificial Intelligence ( AI ) to identify even the most sophisticated fraud schemes .

The report also indicated that money mule-related fraud is a leading challenge facing financial institutions . Money mules are a key element in authorised payments fraud and scams , new account fraud and in moving illicitly obtained funds . The report explains that while mules don ’ t generate direct loss at an FI , they do impact revenue because these accounts aren ’ t profitable , are costly to acquire and maintain and expose FIs to regulatory scrutiny and reputational damage . � www . intelligentfin . tech

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