Banks globally still finding it hard to manage online financial fraud
Banks and payment organizations globally are still finding it difficult to manage online financial fraud in today’s connected and complex technological landscape. This is according to a survey conducted by Kaspersky Lab and B2B International.
The survey found out that over a third (38%) of the organizations admitted that it is increasingly hard to tell whether a transaction is fraudulent or genuine.
The explosive growth of e-payments, combined with new technological developments and shifting business needs, has forced companies to enhance the effectiveness of their business processes in recent years. In many cases, this has been achieved by implementing e-flow systems for interacting with suppliers and clients etc. E-payments of all types have become so ubiquitous today that it is absolutely impossible for businesses to completely avoid electronic transactions of any kind.
As companies become increasingly immersed in digital environments, ensuring business continuity and protecting themselves against cyber threats will be crucial. As the number of online transactions increases, so does the level of online fraud, with 50% of financial services organizations surveyed believing online financial fraud is increasing. It is clear that financial institutions need to make every effort to protect their business and customers from cybercriminals.
The survey showed that 41% of businesses have implemented an in-house cybersecurity solution and 45% rely on a third-party solution from their bank, to mitigate the risks. Still, 46% of companies have either only partially implemented a solution against financial fraud, or have not implemented one at all. Among financial organizations, only 57% have a dedicated anti-fraud security solution.
According to these findings, about half of the organizations operating in the electronic payments landscape use non-specialist solutions, which, according to statistics, are unreliable against fraud, and show a high percentage of false positives. The incorrect use of security systems can also lead to transactions being blocked. It should also be noted that the deviation of payments may lead to a loss of customers and, ultimately, profits. This is, therefore, a critical issue for every business. Fraud itself is not the only problem, financial institutions need to reduce the number of false alarms in their systems, to provide the best customer service possible.
“Considering the aggressive competition in today’s fierce financial services market and the extreme disruption from non-traditional providers, a trusted relationship between customers and their financial institutions is a decisive factor for the long-term prosperity of any company. The interdependence of the digital relationships between all financial services market players also means that if any organization in the value chain experiences a digital service issue (whether due to fraud, breach, cyber-attack, etc.), the damage can quickly spread to the other organizations in that digital financial service value chain. As the already high volume of customer demand for online transactions continues to increase, all companies (its customer-facing digital platforms, infrastructure, data, and employees) should be secure, convenient, and prepared. It’s crucial, therefore, to use specialized fraud prevention solutions that will provide customers with the most convenient and safest service possible,” comments Ross Hogan, Kaspersky Lab Global Head of Fraud Prevention.
Kaspersky Lab’s experts recommend that banks and payment services use comprehensive online fraud protection methods to protect their clients at several levels. Such as Kaspersky Fraud Prevention platform, which includes threat control tools installed on client devices, as well as the server component located within the bank’s information infrastructure. It provides multi-layered protection for online and mobile banking.