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Digital fraud attempts ramp up in financial services

New research from TransUnion shows an increase in digital fraud attempts in the financial services industry, as more consumers go online for banking and other financial transactions. Image credit: Bermix Studio on Unsplash
Image credit: Bermix Studio on Unsplash

New research from TransUnion shows an increase in digital fraud attempts in the financial services industry, as more consumers go online for banking and other financial transactions.

“The rate of fraud attempts was up globally and especially in the financial services industry because fraudsters understand this is where the most high-value transactions are taking place. While this industry is traditionally known for in-person transactions, fraudsters have recognized its rapid digital acceleration and are trying to capitalize,” said TransUnion Philippines President and CEO Pia Arellano in a press statement.

Rise in digital fraud

“We are seeing more financial services organizations implement fraud prevention solutions with some success, though our findings make it clear that this is not the time to relax. As the economy begins to open up and perform better, businesses need to do even more to ensure they are providing a secure marketplace that offers friction-right experiences to consumers,” Arellano said.

When comparing the last four months of 2020 (Sept. 1-Dec. 31) and the first four months of 2021 (Jan. 1-May 1), TransUnion found that the percentage of suspected digital fraud attempts coming from the Philippines in financial services increased by 50%, the highest among all industries analyzed. Globally, the rate of digital financial services fraud attempts increased by 149%.

Across industries, the rate of suspected digital fraud attempts globally rose 24% when comparing the first four months of 2021 with the last four months of 2020. The percentage of digital fraud attempts coming from the Philippines increased 19% during the same time period.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as communities, financial services, gambling, gaming, retail, and telecommunications, among others. The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite, TransUnion TruValidate.

“The key takeaway for businesses is that fraudsters do not treat every industry equally. They often pick and choose an industry to focus on based on the time of year or what businesses are seeing more transactional activity. At times, fraud attempts are conducted at random simply to determine if businesses are prepared to meet their challenges. In this critical time, it pays to be one step ahead,” Arellano said.

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