Fraud prevention is the implementation of a strategy to detect fraudulent transactions or banking actions and prevent these actions from causing financial and reputational damage to the customer and financial institution (FI). As the online and mobile banking channels become more popular and FIs continue to digitize, a strong fraud prevention strategy is only going to become more important.
Fraud prevention and cybercrime are connected and always changing. As fraud prevention professionals develop new authentication and fraud detection solutions, the fraudsters are networking with each other, monetizing, and exchanging information on the Dark Web. Fraudsters today are using sophisticated strategies and malware to succeed in their fraudulent activities. Though fraud prevention technology has made great advances and continues to do so, it’s important to be aware of fraudulent tactics and understand how to prevent fraud.
The coronavirus crisis has seen a rise in many different types of fraud, and while some authorities are prepared to give leeway on certain risk mitigation activities, businesses need to ensure they remain alert to current and future risks.
A wide range of frauds related to the pandemic is understood to be on the rise. These include scams relating to the purchase of PPE or hand sanitisers (where goods either do not exist or are of sub-standard quality). There has also been an increase in phishing and smishing (using text messages) scams and identity thefts, which may be an attempt to take advantage of the increase in people working from home and potentially less stringent security arrangements. Attempts to fraudulently access government funds made available to help ease the economic impact of the pandemic (such as the Job Retention Scheme) are also thought to be on the rise.
At the same time, other traditional scams such as computer software or telephone-based fraud have seen a decrease in activity, the latter perhaps in part due to the lockdown in parts of Asia, where illegitimate call centres are often based.