BY Fraser Tennant
Despite efforts to thwart scammers through regulation and government action, fraud levels are continuing to increase across the globe and rocketed in H1 2023, according to a new report by NICE Actimize.
In its ‘Delving Deeper: 2023 Fraud Insights Second Edition’, the financial crime solutions provider reveals that FIs are under mounting pressure due to the surge in fraud attacks, rising transaction volumes, and the ever-evolving landscape of regulatory and consumer liability requirements.
The report’s key findings include: (i) total payment volume is up 22 percent when compared to H1 2022; (ii) the value of these payments and fraud value has increased by 18 percent; (iii) the attempted fraud rate for international payments increased 31 percent in H1 2023; and (iv) for international transactions, 60 percent of the fraud was conducted using money mules rather than traditional peer-to-peer (P2P) methods
According to the report, the rise in fraud and scams can be traced back to the increase of real-time payments, which are quick and easy ways for scammers to find their victims. Also adding to the pressure on FIs is the April 2024 liability shift deadline for compliance with new, mandatory regulatory rules.
“FIs should not wait until April 2024 to act,” said Chad Hetherington, vice president and head of product at NICE Actimize. “With the rise in real-time payments creating new opportunities for scammers, FIs and banks must act now to catch criminals quicker.
“The speed, ease, and varieties of scams gaining traction shows fraudsters are investing in new and perfecting existing scams,” he continued. “These issues all signal the immediate need for FIs to take action to adopt next generation technology to fend off the threats of tomorrow.”
The report also notes that the scale of fraud attacks along with new mandatory regulatory requirements has forced FIs to expand fraud prevention into other areas for improvement. These include changes in regulation, with fraud liability shifts top of mind, especially in the space of scams and authorised push payment (APP) fraud.
Mr Hetherington concluded: “As cooperation grows within the financial services industry, collective intelligence and innovation will be vital so FIs can protect both their organisations and customers.”