Preventing digital fraud in 2023

By Zion Rufus

As new fraud trends gain momentum across the globe, digital fraud losses have been projected to surpass $343 billion globally between 2023 and 2027, with Neobanks recording a fraud rate that is twice as high as the fraud rate for credit cards.

The explosive growth of first-party and Fintech frauds such as identity theft, data breaches, phishing, web skimming, social engineering, and botnet attacks, application fraud, micro-deposit fraud, payment fraud, and account takeover amongst others have also become a prevalent cause for concern.

According to a NIBSS report, fraud attempts in Nigeria via mobile channels saw a 330% increase YoY, while attempts via web and POS channels saw a 173% and 215% increase YoY between 2019 and 2020.

To help Fintechs detect and prevent online frauds, Security Boulevard highlights 5 major approaches.

Maintaining robust KYC processes during digital client onboarding

Criminals often use stolen or synthetic information to commit fraud, so having an automated customer identification program can help fintechs to keep criminals out, while getting legitimate clients set up without delay.

Monitoring all transactions over time to assess evolving risks

As cybercriminals become more skilled at getting past anti-fraud solutions, it’s crucial that fintechs and other businesses keep their defenses current and relevant.

Prioritising alerts through Machine learning

Transaction monitoring is time-consuming for your fraud prevention team, and machine learning can help with spotting red flags. Once an unusual transaction that falls outside of expected customer behavior patterns is identified, your team can prioritize it, drilling down to assess if the activity is fraudulent.

Classifying risk Real-time

Acting fast is important when it comes to stopping fraud. Risk classification includes assessing the device ID and reputation, network & IP, user behavior analytics, and more. This allows your team to make real-time decisions to determine a risk score.

Enforcement challenges

Some customers are riskier than others, and by using risk scoring, you can make the right decisions for your business. Accessibility of enforcement challenges should be key, providing a way to manage bots efficiently while offering human fraud challenges that keep usability for all genuine customers in mind.

With lots to think about when it comes to fraud prevention, you need a partner who can help you to stop cybercriminals before they cause financial and reputational damage to your business. Read on to learn why some fintech fraud detection solutions are dated, and how we can offer a better way to fight fraud.



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