Cybertonica experts look at fraud trends and cyber risks as the Year of the OX begins. Fortune favours thosedetermined and committed in this year of the gentle animalwho is strong in mind and focused on hard work.
The year of the Ox began on February 12th, bidding farewell to the year of the Rat – appropriately named! Thereby giving us a second chance at kicking off 2021 after a very rocky first month by the Gregorian Calendar.
The dominant working animal in all of East Asia throughout the centuries is the determined and resilient OX. Maybe the year of the OX can give us all some of its good fortune?
Let’s see the biggest emerging challenges and trends in fraud and cybercrime that Cybertonica’s fraud finders have looked ahead at.
Dangerous increase in Mobile Banking Fraud
The rise of all-digital commercial and banking lives has led to the explosion of mobile and #challenger banks. For instance, 47% of adults in the UK use mobile banking, while in some emerging markets this has skipped ahead to 60%. With #COVID19 cases increasing, we expect to see #mobile banking use penetrate the majority of all banking users to around 7B users worldwide within the next 12 months.
The data indicates that criminals also know this trend well, as attacks on financial institutions have increased by over 600% since 2015. There’s a problematic lack of security and customer training rendering accounts vulnerable. In large scale money laundering, fraudsters create mule accounts that allow them to build parallel channels to move funds through mobile banking.
Cybertonica has dealt with 100s of millions of transactions for our customers using our ScreenWiZe solution. Integrated with our core platform, ScreenWiZe detects infected mobile devices and ensures secure authentication to reduce the opportunity for fraud in online banking.
“The New Normal”: Remote Working Risks and Fraud Trends
Unquestionably, the risks of internal fraud grow when economies are tight. The cyber risks associated with unprotected remote working environments are significant. Tier 4 restrictions are in place across the UK and lockdowns through Europe and the US. Around 50% of people now #WFH. It’s very likely this will become the rule and not the exception. An estimated 35% or more will opt to work from home, even after the COVID crisis subsides (whenever that will be!).
Operating in a near-100% virtual environment requires a different level of monitoring and security on payments and #cyberthreat. For example, there is too little control on using personal devices for business.
Our expert team expects insider and remote workers to be both a fraud risk and target of fraudsters in 2021. We are partnering with new risk and cyber threat data supplier to enhance security and device monitoring offering.
PSD2: The Move to Behavioural Biometrics Enhanced Authentication
The long awaited #PSD2 SCA requirements are coming into play in 2021 . Cybertonica is working closely with merchants to ensure checkouts are compliant and the customer experience is frictionless.
With compliance deadlines imminent, the race to becoming #SCA compliant has begun. This new legislation promotes greater security for digital transactions and creates stronger industry standards across SCA protocols.
This year, passive behavioural biometric based authentication will come into the mainstream. New secondary authentication methods have been approved through the alignment and push of EU and UK’s regulators.
Behavioural biometrics, an inherence factor within the authentication mix is specific to the user. For example, their keystroke dynamics, typing speed, and gyroscopic movements (the angle and tilt applied to the device when in use). We build anonymised user profiles to authenticate users based on unique behavioural patterns.
Our team is ahead of the curve harnessing technology to ensure only legitimate users and secured devices gain access to your transaction platform. While you plant the seeds of the consumer’s needs, the hard-working Ox of Cybertonica is quietly, frictionlessly plowing the field to clear it of rocks and weeds that slow your business down.
Mega Trend: Retail Digitalisation
The eCommerce explosion has accelerated full steam ahead creating another fraud trend. This year, we are ready to see more retailers digitalising, to capitalise on online sales.
Costco and T.J.Max have already jumped on board, creating their own online stores. Shopify credits this continued explosion to consumers being hesitant to return to in-store shopping. Shopify merchants sold $2.4 billion in sales globally, representing a 75% rise from the year before. Shares in all delivery and logistics businesses are through the roof.
Our team predicts this will continue and that fraud will follow the curve. We will see an increase per share of transactions as more inexperienced online buyers come online for the first time. We need to combat the threats and ensure profits land in the right pockets.
COVID19: The biggest, single source of fraud and associated payments in recent history
At the start of the pandemic, we first saw the rise in fraud attacks. For instance, Google blocked a shocking 18 million COVID19-related phishing emails in April 2020 alone and that number continues to rise.
While citizens were in tight lockdown and resorted to the comfort of the internet, #cybercriminals trawled the internet searching for the vulnerable users, institutions and systems.
Sadly, we believe that large scale identity and support payment fraud has just taking off in the year of the Ox. Government schemes set up to support those vulnerable during the pandemic failed to use reliable checking systems to ensure the financial aid was being delivered to legitimate claims.
Over 33,000 suspicious activity reports have now been filed against the government’s support measures (CityAM); HMRC reports that 10% of the allocated £35B financial packages were mistakenly given to fraudulent claims. In addition, it is estimated that over USD$100B was misdirected and stolen by different groups of fraudsters in California last year.
Now, fraudulent #phishing messages are offering fake NHS vaccines in exchange for bank details or payments. Unfortunately, thousands have fallen victim, hoping to be next in line for the vaccine.
Acceleration in Financial Inclusion in the digital payment ecosystem
1.3 million adults in the UK remain unbanked (FCA, 2018), and 1.7 billion across the world. Where is the commitment to bank the unbanked?
Cybertonica is keen to see those without basic financial services have access to transaction accounts to perform their basic payment needs. We believe this will be a key enabler to fighting poverty, raising living standards and boosting prosperity.
We’re becoming an increasingly cashless society where digital payments are our norm. Above all, digital financial services can be secured in any environment using a robust platform and strong analytics from our data science team.
The impact of accelerated inclusion efforts can be vividly seen in Africa where innovation is leap-frogging the old banking offers. Nigeria, Kenya and South Africa have enormous prospects and very active #Fintech communities where Cybertonica is becoming a trusted partner.
The year of the Ox started not a minute too early. It enters 2021 facing some serious fraud trends and challenges. And, we continue to work “hard as an OX” to make this year beneficial for our customers and their end users.
This year, we’re putting our shoulder to the plow of preventing and detecting fraud trends and cyber risks by extending our products deeper into eCommerce and #neobanking, making partnerships that will increase the security and customer experience. We will do this by bringing behavioural biometric authentication and enhanced fraud scoring into the mainstream.
Let’s protect payments, keep fraudsters on defense and put less money in criminal hands. Let’s maximise merchant’s profits amidst the eCommerce explosion, and banking on an acceleration in financial inclusion within the payment ecosphere. And, we’re encouraging businesses to take a step back and look at their fraud, risk and cybersecurity infrastructure and strategy.
If you need a robust and friendly and very very clever Ox, do not hesitate to get in firstname.lastname@example.org