The global banking fraud investigation is the first carried out by consultancy KPMG and has revealed a massive increase in fraud attempts over the years.
The survey was conducted among 43 retail banks globally, including eight in Australia, and 60% of respondents saw an increase in the volume of fraud.
Last year, fraud cost Australians almost half a billion dollars with more than 177,000 scam attempts, according to Natalie Faulker, global head of fraud at KPMG.
“We are seeing a disproportionate volume of scam attempts against Australians: there were 177,000 reports of scams here last year, costing almost half a billion dollars. This compares to around 85,000 reports of scams in the US and UK, with much larger populations. »
Respondents noted an increase in external fraud typologies, including identity theft and impersonation fraud: 38 percent of respondents felt the monetary value of each fraud had decreased and 21 percent felt that she remained the same.
However, more than half of those surveyed said fraud recoveries accounted for less than 25 percent of losses, demonstrating the importance of prevention rather than recovery.
Across all regions, cyberattacks and data breaches are the top challenge reported by financial institutions. And in the Asia-Pacific region, the other four challenges were social engineering, faster payments, evolving digital channels and open banking.
“Fundamentally, financial institutions must understand the digital transformation that is rapidly occurring all around us, appreciate the evolving fraud risks arising from this rapid change, and design a fraud risk management framework that can mitigate these risks. fraud in a sustainable and effective manner. and effective,” said Lem Chin Kok, forensic lead for Asia Pacific at KPMG Singapore.
Cyberattacks and data breaches are nothing new to the industry and are indeed a challenge for most organizations, as hackers have proven by hacking major brands like Yahoo, Facebook and eBay.
The second challenge faced by the Asia-Pacific region is social engineering, which presents itself as an option through the method of investments or romance scams.
This is a particularly pronounced problem in Australia, where the ACCC Scamwatch reports that investment scams and romance scams are the most financially damaging scams in Australia, increasing by 34 percent to $86 million. last year.
As KPMG pointed out, these scams were particularly difficult to prevent because it is often the customer who accesses their own account to send money and, in many cases, emphatically blames the recipient’s reputation.
Even though major banks had less than a week to implement open banking, this was seen as a major challenge by financial institutions around the world.
Although open banking is unlikely to be activated within a week, the reform presents a shift in fraud risk management as more payments will be made via digital channels and banks will rely on third parties to protect customers informed via APIs.
KPMG said banks need to improve their ability to analyze big data in the environment and enable navigation through APIs.
More sophisticated fintech providers are emerging to help banks better identify and mitigate risks, and many Australian banks are establishing anti-scam services to work alongside fraud prevention, the survey found.
“Fraudsters are finding new and creative ways to steal from banks and their customers, increasingly moving from account takeovers to scams – manipulating and coercing customers into giving access to their bank account or making payments to fraudsters” , Ms. Faulkner said.
Banks must be aware of the risks posed by the digital world and constantly strive to provide a more secure platform for their customers, Ms Faulkner said.
“Banks must be agile to respond to threats and adopt new approaches and technologies to predict and prevent fraud. »
