Online payment fraud losses to exceed $200 billion over next 5 years

25 februarie 2020

Ongoing high level of data breaches and fraud innovation driving losses

A new study from Juniper Research has found that businesses in eCommerce, airline ticketing, money transfer and banking services, will cumulatively lose over $200 billion to online payment fraud between 2020 and 2024; driven by the increased sophistication of fraud attempts and the rising number of attack vectors.

The new research, Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2020-2024, found the increasing ubiquity of digital payments provides an ever-increasing attack surface for fraudsters. The research recommends that payments industry stakeholders focus on an omnichannel fraud approach to mitigate these challenges. This approach must encompass both strict cybersecurity at access points, as well as analytics such as machine learning, to identify fraudulent behavioural patterns.

For more insights, download the free whitepaper: Fighting Online Payment Fraud in 2020.

Machine Learning crucial to fighting rising fraud

The new research found that machine learning has become a crucial tool in the fraud detection and prevention arsenal, as it enables payments industry stakeholders to analyse transaction flows in a holistic way, unlocking hidden insights on fraudulent behaviours. The incorporation of machine learning into fraud detection and prevention software will drive spending forward, reaching $10 billion in 2024, a 15% increase on 2020.

Research co-author Nick Maynard explained: “The rapidly evolving nature of payment fraud and increased sophistication in attack methods requires machine learning adoption at scale, in order to minimise risk. Constant innovation in analytics and data models is increasingly essential to constraining fraudulent behaviours in payments”.

Money transfer fastest growing payment fraud segment

The research also found that digital money transfer is a growing area for payment fraud, with losses growing by 130% from 2020 to 2024. Digital money transfer fraud is particularly strong in emerging markets, with payments vulnerable to SIM swapping fraud and synthetic identities, with less robust security measures in place. The research therefore recommends that ongoing KYC (Know Your Customer) verification, including events-based re-verification following onboarding, are elements that are essential to secure the rising levels of digital transactions.

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Adrian Vasilescu – consilier de strategie al guvernatorului BNR

„O singură provizie am făcut, de card, pentru că nu mai umblu cu banii în buzunar. Banii sunt cei mai periculoși când este vorba de răspândirea unei molimi. Am renunțat la cash. În rest, este o prostie să faci provizii. Dacă vine o molimă și nici nu știi când va ajunge, dacă ar fi să se întindă, pe cât timp să poți să faci provizii? Faci provizii pe trei săptămâni, pe patru săptămâni și mai departe?”, a spus consultantul.

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In 23 septembrie 2019, BNR a anuntat infiintarea unui Fintech Innovation Hub pentru a sustine inovatia in domeniul serviciilor financiare si de plata. In acest sens, care credeti ca ar trebui sa fie urmatorul pas al bancii centrale in 2020?
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