As the World has Become Increasingly Digital, So has Fraud

It’s 2019 and we are all living in the digital age. Technology is so deeply embedded in our lives that we cannot imagine a way of life without it. From smartphones to smart TVs to floor cleaning robots, our lives have changed forever. Digital devices have revolutionized to the way we have access to information; in short, everything has become a high-tech affair.

This change, in part, is due to the increasingly tech-savvy consumer-based world that is progressive and open to all the radical changes in industries across the board. The prospect of convenience through digital means has never been better. This means people are more open to sharing their information online in return for immense value. Therefore, it is no surprise that even the world of banking finds itself in the digital realm. The problem? The increasing use of digital services has also increased the risk of fraud.

The Risk of Fraud

Financial fraud has increased significantly in recent years. According to the ICAS, financial fraud in the UK alone saw an increase of 40 percent in 2016 from the year before. The data coming in from the Office of National Statistics in the UK reported an increased number of cases of fraud. This includes everything from online scams to card fraud and most of the crimes go unreported by the general public. This means that the actual figures are much higher than what has been officially accounted for.

Fraud is not something new in the world. It has occurred in various forms throughout history. The digital age has also seen different kinds of fraud ranging from identity scams to computer hacking-related incidents. One of the most problematic fraud cases, however, is cybercriminals falsely creating or diverting the payments made by consumers online, without the consumer even realizing it. This can result in direct losses to businesses.

Organizations nowadays maintain a lot of consumer data. This makes organizations an increasingly lucrative prospect for cybercriminals to target. It does not matter what industry an organization belongs to, customer information like home addresses, names, social security numbers, birthdays, delivery addresses and bank accounts are stored in a large number of databases. All this information is prime material for cybercriminals to exploit.

The e-commerce industry is at risk of fraud in particular. There are plenty of potential weak points that cybercriminals can exploit from the PoS systems to the supply chains. Further complications in the e-commerce industry arise because of the fact that the risk can be both from the outside world and internally through disgruntled employees. Most retail transactions take place digitally and are completely automated. Increasing convenience for consumers and businesses have also opened up the doorway for increased cybercriminal activity.

Cybercriminals of the Modern World

One of the main reasons why cybercrime is increasing is due to the fact that cybercriminals are operating at a high-tech level. There are those perpetrators that can go to extraordinary lengths to gain any useful information. The production of PIN and chip for credit cards have seen an increase, thereby defrauding people of their money. Cybercriminals are now resorting to everything from online fraud to postal fraud where they set up mail boxes so that mail is all redirected towards them.

Of course, criminals are also fully capitalizing on the aspect of human vulnerability. They pose as a bank or the IRS demanding payments or duping them to give them vital personal information through email or phone calls and these scams are not letting up. This, in effect, gives them all the information they need to access funds and take them out of their victim’s bank accounts.

While the tactics by cybercriminals have become more sophisticated, consumers are still looking for better speed and flexibility within the digital services they use. This poses a challenge for businesses. They need to provide their customers with faster and more flexible services while increasing the security of customer information and that of the organization itself.

Fighting the Threat

Fraudulent individuals and groups will always be a problem. They are constantly looking for vulnerabilities that they can exploit. They can even use grey areas within systems which allow them to enact compromises that benefit them at their victim’s expense. Most of the time, these issues occur within the interfaces of the business systems. The multifaceted nature of the interfaces means that there is a human element cybercriminals can target and exploit.

In order to combat this issue, consumers should be encouraged to report any and all emails being made by people claiming to be their banking providers. There is no way that a legitimate organization will ask for the banking and/or security details of its customers through email and phone calls. Customers need to learn to be suspicious of these requests for information. It also goes to say that customers need to start using stronger passwords to protect their information in all their digital devices.

What Can Organizations Do?

For organizations, the challenge is to recognize anything that is unusual under the guise of something legitimate. There are a few things that they can do to make this happen.

Learn about the threats

Understanding how different kinds of fraud happen and an organization’s specific risk of exposure to these threats can help them improve their cybersecurity. They can also become better at avoiding the kind of behavior that puts them at risk as an organization to all the threats.

Implement data analytics and threat reporting in real time

It will help organizations become more effective at identifying fraud before any data becomes compromised. It will also help them notice any and all abnormalities.

Update response plans

If any incidents take place, it is important for organizations to deal with the incidents properly. They need to learn how to identify and deal with the situation in a faster and more efficient manner.

Posted On March 16, 2019