Financial Services in 2023 will face a greater threat from fraud than ever before. Cybercriminals will increasingly use sophisticated techniques to exploit vulnerable systems, with attacks becoming more advanced and harder to detect.
A report published by The Association of Certified Fraud Examiners (ACFE), estimates that up to 5% of corporate revenue is lost to fraud each year, which accounts to about US$4.7 trillion worldwide (Read article here).
LexisNexis Risk Solutions released a survey in May and July of 2022 that examined fraud trends for more than 500 US and Canadian financial services firms. Banks lose a total of $4.36 in additional costs for every dollar of fraudulent activity, a 16.2% increase from $3.64 in 2020. Mortgage firms also had a comparably higher cost of $4.20 per dollar lost to fraud. (Read article here).
A Sumsub’s report published on BusinessWire states that in 2022, fraud in the banking sector has increased nearly 100%. Account takeovers and chargeback frauds are popular schemes used by fraudsters. Stolen bank cards are used by fraudsters targeting the financial services, e-commerce, and gambling industries. Payment fraud grew 40% from 2021 to 2022—a dramatic increase that led to a rise in share globally (Read article here)
As the world moves into the digital age, fraud schemes have become prevalent. Organizations and individuals should be even more vigilant in combating fraud.
Here are some of the fraud trends to watch out for in 2023:
- Automated Phishing Schemes: Cybercriminals will continue to launch automated phishing campaigns with the intention of stealing user credentials, such as passwords and usernames.
- Card Not Present Fraud: With more customers opting for online and contactless payments, banks should be prepared for an increase in card-not-present (CNP) fraud.
- Business Loan Fraud: As banks become more involved in lending to small and medium-sized businesses (SMBs), they should look out for fraudsters who take advantage of the situation by applying for loans with false information.
- Social Engineering: Social engineering is a type of fraud that involves using deception and manipulation to gain access to someone’s personal information or financial resources.
- Synthetic Identity: The fastest growing financial crime in the US. This is where fraudsters combine an individual’s information with fraudulent information to create a fake identity.
As fraud schemes continue to climb, many organizations are turning to the power of Artificial Intelligence (AI) for their fraud detection needs. Banks and credit unions can use AI to protect themselves against fraud and make more informed decisions by leveraging their data.
With our NEMESIS, organizations can identify patterns or anomalies in transactions or member behavior that may indicate fraudulent activity.
NEMESIS is an all-in-one AI platform that offers data cleansing, data modeling, and customizable dashboards. It also provides an in-built Case Management System where analysts can take immediate action without leaving the platform to prevent losses. Coding is not required.
Detect, prevent and mitigate any abnormal or suspicious activities through NEMESIS.