Fraud is on the rise, according to the Association of Certified Fraud Examiners, companies are exposed and consumer trust is low. Thankfully, there are concrete measures businesses and individuals can take to protect themselves.
A sweeping problem
The recently held Association of Certified Fraud Examiners‘ Fraud Awareness Week highlighted the challenges and trends in international fraud. While definitive numbers are all but impossible to obtain, as successful frauds often go undetected, Price Waterhouse Coopers’ “Global Economic Crime and Fraud Survey 2020” revealed that companies had lost US$42billion to fraud over the year, that 47% of companies had suffered from fraud in the previous 24 months and that the average number of frauds reported by companies was six. Worryingly, only 56% of companies investigated their worst frauds.
Callsign, a global company specialising in digital identity verification, develops solutions to combat fraud through the verification of identity for customers ranging from banks to governments. The company’s work is of vital importance, given how consumers have migrated online over the course of the pandemic. It comes as no surprise that increasing online activities lead to increasing levels of online fraud attempts. According to the company’s latest research, 66% of people in the UAE have received messages from scammers masquerading as their bank and 50% of UAE customers have received a scam message purporting to be from e-commerce retailers. “The problem has become so pervasive that consumers don’t trust the technology processes designed to protect them from fraudsters and confirm identities,” said Saeed Ahmad, Managing Director, Middle East, and North Africa, Callsign.
“The global pandemic has enhanced the region’s digitalisation, but also turned fraud into the most prevalent type of cybercrime, whose share on the global threat landscape surged to dramatic 73%. Group-IB analysts divide such episodes into two major groups —scams and phishing attacks. The former describe situations in which victims voluntarily reveal their sensitive data, while phishing attacks relate to cases in which users have their bank card details compromised,” says Ashraf Koheil, MEA Director of Business Development at Group-IB, a global cybersecurity firm.
Solutions
While fraud is on the rise, there are solutions and means by which individuals and companies can protect themselves and the responsibility needs to be shared. “One of the best ways to prevent scams and protect against risk is putting as many barriers as possible between it and potential victims,” says Ahmad. By placing barriers, including biometrics, companies can increase the time customers take to make a decision, thereby increasing the time they have to reflect on their actions as well as the difficulties fraudsters face in perpetrating their crime.
Individuals themselves have to practice ‘digital hygiene’ according to Koheil, “Any request to give personal or financial information, make a money transfer or download material should be treated with suspicion.” Users have to understand the need to protect their data very carefully and to guard themselves accordingly as scammers are known to imitate famous brands or trusted firms to gain trust and solicit information.
It is only with the adoption of cutting-edge technologies that companies will be successful in the fight against fraud, according to Koheil and Ahmad. AI-based systems can track customer behavior, helping to identify suspicious activity and, ultimately, verify legitimate identities. AI systems can also identify the broader context about attackers that target companies and effectively prevent client-side fraud. “Layering contextual data and behavioural biometrics over passwords, device and location data to positively identify users, means there is less reliance on a small amount of evidence such as a password, which doesn’t necessarily prove the person is who they say they are,” says Ahmad. Key to the process is identifying legitimate clients or customers and allowing them to go on with their digital lives unobstructed.
Companies need to work with cybersecurity firms and make use of dedicated anti-fraud defences, according to Koheil, “To be one step ahead of fraudsters, organisations need to detect all [the] infrastructure components developed by a scammer.” Group-IB’s Digital Risk Protection systems can help “companies protect their digital assets, brand, personal and corporate reputation against such acute threats as fraud, phishing, online piracy, data leaks, and the illegal use of their trademark,” he says.
Events such as the International Fraud Awareness Week are vital for the dissemination of information and the creation of best practices. “These initiatives are very useful to get organisations to share best practices and work together to fight fraud and protect their customers. Also, they are vital to minimise the impact of fraud and promote anti-fraud awareness and education,” says Ahmad. Echoing the sentiment, Ashraf highlighted the importance of companies being aware of the fraud environment and educating staff, and pointed out that, “Initiatives such as the ‘International Fraud Awareness Week’ help decision-makers and employees alike get the correct information to take on this threat head-on.”
The digital fraud landscape is ever-changing, though some principles remain constant when it comes to defence. Layering of defences, such as biometrics, passwords and behavioural analysis, along with education of both consumers and staff are vital. As threats become more advanced, liaison with dedicated cybersecurity providers is becoming a must.
