Top Fraud Trends for 2024 & How to Prevent Them
The impending shifts in fraudulent activities, from the clandestine world of cyber-crime-as-a-service to the heightened sophistication of social engineering attacks, beckon enterprises to fortify their defences. Understanding these emerging trends is not merely a proactive measure; it serves as the linchpin for orchestrating a resilient defence against the unseen forces poised to exploit vulnerabilities. This narrative deciphers the enigma of the top fraud trends for 2024, shedding light on the path to prevention and fortification in the realm of cybersecurity. From the AI-fueled advancements propelling deepfake technology to the escalating risks of synthetic identity theft, account takeover fraud, and card-not-present (CNP) fraud, each trend underscores the imperative for businesses to be vigilant custodians of their digital fortresses. Insider threats, social engineering attacks in the age of remote work, the proliferation of cybercrime-as-a-service, and the exacerbating impact of cybersecurity skills shortages further accentuate the multifaceted challenges on the horizon.
In the intricate dance between technological innovation and criminal ingenuity, the realm of fraud continually evolves, presenting new challenges and pitfalls for businesses. As we step into the horizon of 2024, the landscape of fraudulent activities is poised for dynamic shifts. From the clandestine realms of cyber-crime-as-a-service to the ever-increasing sophistication of social engineering attacks, the top fraud trends for the coming year beckon businesses to fortify their defences.
In this unfolding narrative of digital deception, understanding the emerging trends is not just a proactive measure but the key to orchestrating a resilient defence against unseen forces seeking to exploit vulnerabilities. Join us as we unravel the enigma of the top fraud trends for 2024 and illuminate the path toward prevention and cybersecurity fortification.
Top 8 fraud risk trends to watch out for in 2024.
1. AI-Fueled Advancements Propel Deepfake Technology
Deepfake technology, stemming from the amalgamation of “deep learning” and “fake,” leverages artificial intelligence (AI) to create convincing fake audio, video, or images. This technology can impersonate individuals, leading to identity theft and posing a threat to businesses. Deepfake applications extend to simulating speech, actions, and emotions with remarkable realism.
While deepfakes are increasingly prevalent on social media platforms, their application can extend to defrauding businesses by dumping employees into compromising sensitive information, releasing funds, or engaging in fraudulent transactions. Reports indicate that the number of deepfakes has been doubling every six months since 2018, indicating persistent growth, particularly with recent advancements in AI technology.
2. Detecting Synthetic Identity Theft Becomes More Difficult
Research conducted by GDG reveals that more than 8.6 million people in the UK have used fake or someone else’s identities, either in person or online, to obtain goods, services, or credit. Synthetic identity theft involves a combination of authentic elements, such as real addresses, and fabricated information, making it exceptionally challenging to identify and prevent. The use of legitimate components alongside false details complicates detection efforts. Additionally, since these fraudulent identities lack prior credit history or associated suspicious activities, they can elude traditional fraud detection systems relying on historical data patterns.
3. Steep Rise in Account Takeover Fraud
Account takeover (ATO) fraud occurs when criminals gain unauthorised access to genuine consumer accounts, such as social media, email, or bank accounts, using stolen information. ATO fraud witnessed a significant 350% year-on-year increase in 2020, with financial services firms experiencing 72% of these attacks. In 2021, account takeovers contributed to 20% of data breaches, resulting in losses exceeding $5.1 billion for consumers and businesses. This underscores the urgency for financial institutions to proactively safeguard their customers and serves as a stark warning to other industries about the serious threat posed by account takeovers that demand vigilance and preventive measures.
4. Businesses are more Vulnerable to Liability for Card-Not-Present Fraud
Card-not-present fraud (CNP) occurs when consumers make online, telephone, or mail payments, where the card is not physically presented to the merchant for verification. In cases where a cardholder’s billing information is compromised, unauthorised individuals may use the card for illicit purchases. The surge in e-commerce, coupled with consumer demands for swift online transactions, creates ample opportunities for fraudsters to exploit vulnerabilities in online payment systems, manipulate checkout processes, or employ stolen card details for fraudulent transactions.
Unfortunately, in many instances of CNP fraud, the merchant bears the financial liability instead of the card issuer or cardholder. This places the responsibility of preventing and absorbing losses related to CNP fraud squarely on businesses, heightening their exposure to financial risks.
5. Elevated Fraud Risk from Insider Threats
While organisations must remain vigilant against external threats, insider threats have surged by 44% in recent years. Insider threats can arise from the actions of current or former employees, customers, or suppliers, either due to malicious intent or negligence. Employees with privileged access represent the highest fraud risk for businesses.
In many cases, insider threats are motivated by financial gain, competitive advantages, or revenge. For instance, 45% of employees download, save, or send work documents to their accounts after leaving a job to impress new employers. This sharing of company documents, contracts, spreadsheets, or customer information poses a significant risk to all parties involved.
Given the increasing employee turnover in the UK, organisations must take proactive measures to mitigate these risks. To minimise the threat of insider incidents, internal controls, stringent work policies, periodic audits, and the cultivation of a strong ethical culture are essential. When dealing with third-party threats, businesses should conduct thorough due diligence, monitor third-party activities, and establish contractual obligations to mitigate the risk of fraud through external partners.
6. Social Engineering Attacks in the Era of Remote Work
Social engineering doesn’t involve a direct cyber-attack; instead, it leverages human psychology to persuade individuals to lower their guard and engage in unsafe activities, such as divulging sensitive information or clicking on malicious links. Phishing, a type of social engineering, requires fraudsters to impersonate trustworthy entities such as banks, government agencies, or trusted organisations to trick people into providing personal information such as passwords or credit card information.
With the prevalence of remote work, social engineering attacks are on the rise. A study indicates that 9 out of 10 respondents believe the threat landscape has worsened, with 75% attributing this deterioration to remote work. Social engineering attackers exploit the increased online communication, with messaging and emails being the primary forms of organisational communication.
In a remote work scenario, employees may be more inclined to respond to requests or click on links without proper scrutiny, especially if the communication appears to come from colleagues or superiors during non-working hours. Remote workers who lack security awareness and education may be more vulnerable to social engineering tactics.
7. Proliferation of Cybercrime-as-a-Service
Cybercrime-as-a-Service (CaaS) equates to the selling of cybercriminal tools, techniques, and services that are easily accessible on the dark web. This accessibility allows individuals with limited technical expertise to participate in cybercriminal activities. The widespread availability and affordability of CaaS create a larger pool of cybercriminals targeting businesses. Malicious services offered include malware distribution, ransomware-as-a-service, and marketplaces for stolen data.
8. Escalation of Cyber Threats Due to Shortages in Cybersecurity Skills
Forbes reports that the shortage of cybersecurity skills significantly contributes to the evolving landscape of fraud risks. The current global skills shortage is estimated at 3.5 million, posing a growing concern for numerous organisations unless they address this gap through outsourcing, training, and retaining top cybersecurity talent. It is crucial to establish future-proof solutions to mitigate the ever-changing landscape of financial crime risks.
The Final Thought
As we travel through the unknown waters of 2024, the world of fraud reveals its intricate tapestry, woven with both innovation and peril. Businesses are at a crossroads due to cybercrime-as-a-service, social engineering prowess, and the ongoing dance between criminals and cybersecurity. The story of emerging fraud trends serves as both a cautionary tale and a catalyst for resilience and vigilance.
The tools to combat these digital adversaries are available and waiting to be embraced by those seeking not just protection but mastery over the intricate choreography of the digital age. Let the knowledge of these fraud trends be the compass guiding us toward a fortified future, where businesses stand as bastions against the tides of cyber deception, ensuring that innovation becomes a force for good rather than a veil for malevolence.
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