Amid a rapidly evolving digital landscape, cybercrime continues to be a persistent and growing threat for financial institutions, which need to remain vigilant and proactive in safeguarding their systems and customer data.

In a recent PaymentsJournal podcast, Patti Reid, Vice President of Card Risk Solutions at Fiserv, and John Buzzard, former Lead Analyst for Fraud and Security at Javelin Strategy & Research, delved into how financial institutions can contend with fraud threats by closing vulnerabilities, detecting multichannel fraud, and mitigating consumer friction.

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Current Trends in Financial Fraud

Technological advancements have contributed to the heightened sophistication of fraudster attacks—and fraudulent tactics have become so complex that they’re increasingly difficult to detect and prevent. Businesses must contend with phishing emails, fake websites and social media profiles, and identity theft, to name just a few.

“One of the things that we’re seeing an increase around is identity fraud,” Reid said. “Identity fraud is becoming more common for criminals because they have access to the information that we’ve traditionally used around authenticating.

“Victims are being preyed upon by criminals pretending to be the financial institutions. Additionally, data breaches have increased significantly around this and all of the traditional means of authenticating—either by being victims being scammed by criminals or the criminals going to the dark web and acquiring those means.”

Automation is also being used for nefarious purposes. Whether by sending thousands of phishing email messages at once or launching bots to detect vulnerabilities, automation is a powerful form of attack that occurs so swiftly that organizations have no time to react before damage is done.

“Criminals are very organized, but they’re also leveraging automation sometimes before legitimate financial service providers are, as is the case with things like bot attacks and scraping websites and trying to just assimilate information and put a dollar value on it,” Buzzard said. “And then they’re just obviously selling it back and forth to one another.

“The consumer is turned into this unwitting, involuntary mule of information and sometimes even money that’s moving back and forth. And it’s not their fault.”