Payment fraud losses to hit $30bn this year
Annual losses from online payment fraud are on track to reach US$22 billion ($30.4 billion) in 2018, growing to a whopping $48 billion by 2023, according to Juniper Research.
The company’s latest research into payment fraud in the commerce, airline ticketing, money transfer and banking services sectors found that a critical driver behind the losses is the continued high rate of data breaches involving the theft of sensitive personal information.
According to the report, cybercriminals are using the information gleaned from these breaches to move away from pure identity theft, instead increasingly concentrating on forming synthetic identities using fragments of real data.
This trend is expected to leave the global international money transfer market particularly vulnerable, a situation that will be compounded by the growing popularity of instant payment services as well as the sector’s focus on transactional rather than behavioural risk.
“Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioural giveaways that indicate this type of fraud,” research author Stephen Sorrell explained.
“Fraud management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up.”
Another emerging trend to watch in the financial fraud arena is growing adoption by cybercriminals of the successful tactics practised by the Magecart and Fin7 hacking groups. These include using a combination of malware and cross-channel approaches.
This more complex type of fraud is expected to become more common as an effective ‘fraud-as-a-service’ economy emerges, the report states.
To combat these emerging threats, organisations should be developing an omnichannel fraud prevention approach.
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