The latest edition of Cyxtera’s Faces of Fraud report, conducted with assistance from the Information Security Media Group (ISMG), collected responses from over 150 financial security leaders about fraud attack and protection trends. The survey startlingly revealed that cyber attack volume and monetary losses have been escalating or staying steady over the past year, despite the many solutions currently being applied to defend against threats. Fortunately, the survey provides insight into where institutions should focus in order to protect themselves against attacks as threats continue to evolve.
Here are some of the key conclusions reached in the report:
Detection is Key
- A shocking 79% of respondents admitted that fraud incidents have increased or remained steady since 2017.
- Accordingly, 70% of security leaders reported that their financial losses linked to fraud increased or remained steady in the same time frame.
- In regards to fraud detection methods, 66% use automated data analysis or transaction monitoring.
These statistics confirm that, although every institution represented in the survey has implemented some type of fraud protection, most solutions still cannot detect all threats by themselves. Phishing protection, for example, still tends to concentrate on emails and domains even as social engineering techniques have spread to other channels. Monitoring strategies only targeting fraud on a single platform lack the visibility to detect and mitigate attacks that use other vulnerabilities in channels such as social media, mobile apps, and chatbots. The development of new attack vectors needs to be matched with protection that can combat and offset these threats; otherwise, financial losses will continue to increase.
- 34% of survey takers expressed that a heavy reliance on manual processes, which inhibit fraud detection response time, is the biggest weakness of anti-fraud tools.
- 43% of organizations reported that the biggest threat to their defenses was the rapid spread of fraud— at a pace too great for them to keep up.
Attackers are constantly adapting their methods to circumvent security controls, making it difficult for institutions to keep up. Reliance on outdated controls dependent on manual processes can only prevent previously-seen threats and cannot provide suitable protection for new and unprecedented attack tactics. To prevent further monetary losses, financial institutions must partner with organizations that take advantage of machine learning and artificial intelligence to automate manual processes and accelerate attack detection, response, and mitigation through solutions able to adapt to a transforming fraud landscape.
Layered Security and User Satisfaction
- As far as the top barriers for fraud prevention improvement, 46% of respondents cited the lack of ability for solutions to communicate and work together, and the fear of new controls interfering with user experience.
- Concerning non-financial consequences, 46% of survey takers suffered a loss of productivity in the aftermath of fraud incidents.
- Adding salt to the wound, an additional 19% reported reputational loses in the wake of a cyber attack.
Outdated controls often require extensive manual processes, require a lot of time to maintain, and lack crucial updates. Layering machine learning on top of monitoring programs can improve protection, facilitate increased communication between current controls, and reduce user friction. The use of data analytics and biometric authentication lowers the risks of forgotten or stolen passwords and improves detection and mitigation while building solid reputability through customer satisfaction.
The Faces of Fraud Are Changing, And So Must Protection
The importance of cyber protection finally seems to have broken through to the C-suite in the 2019 Faces of Fraud report. 100% of security leaders declared their budgets for fraud prevention have increased or remained the same for 2019 compared to previous years. Yet, with the ever-evolving threats and the emergence of new technologies, the question therein lies—where should those finances be invested?
Striking the right balance between effective security and user convenience can be achieved as long as institutions utilize the latest advanced technology. Fraud on other communication channels can be detected through the incorporation of machine learning algorithms that extend the scope of existing monitoring solutions. Outdated defenses can be upgraded with increased automation capabilities to provide better mitigation with less reliance on manual processes. Even customer relationships can be strengthened through frictionless security methods, such as analytics and biometrics, that reduce false positives and hoops to jump through. Your institution's success relies on investing in advanced technology to fight fraud as it is now and how it will evolve in the future.
Check out the full 2019 Faces of Fraud survey report and listen to a podcast interview with Cyxtera’s VP of Operations analyzing the report’s results here.
To view the most compelling results of the survey, click on the image above.