Jamie Melling, pictured, CEO, Smartnumbers, a caller authentication product firm, writes of how Britain can downgrade its status as ‘bank scam capital of the worldโ.
In Britain, youโre more likely to be a victim of online fraud than any other crime. But while bank fraud is on the rise, the number of investigations and prosecutions doesnโt appear to be keeping up. Fraud offences account for 36pc of crimes, with the most common type being authorised push payment (APP) fraud, where a customer is tricked into authorising payment to an account controlled by a fraudster. In fact, total losses from APP scams increased to ยฃ355.3m in the first half of 2021, up 71pc compared to 2020.
Fraud attacks are continuing to accelerate at an alarming rate, with fraudsters duping Brits into transferring their life savings using the latest cons and scams. Against this backdrop, Britain has gained the unfortunate title of โbank scam capital of the worldโ. But why are fraudsters targeting Britain, what vulnerabilities are they exploiting and what can we do about it?
Why fraudsters target Britain
Britain has become a magnet for fraudsters for many reasons. One of the biggest challenges comes down to our fast payment infrastructure, which allows people to make quick transactions. This gives fraudsters a huge advantage by enabling them to con their victims into transferring money almost immediately.
Another factor is the limited policing of online fraud. Many cases are treated as a low priority due to lack of resources and technological skills, with some cases not even being investigated.
Record numbers of people are also online banking and shopping; 76 per cent of Brits use online banking, and 87pc of individuals make online purchases, creating many opportunities for fraudsters to try and exploit personal details to conduct fraud. And since English is a widely used language across the globe, British people are often easy targets, making Britain an ideal testing ground for scams.
Exploiting vulnerabilities in contact centres
According to research by UK Finance, 76pc of banking fraud is committed through internet banking and 13.8pc through mobile channels, with the third most common channel being the contact centre (10.2pc). However, despite this, over 60pc of fraud attacks involve the contact centre, as fraudsters exploit vulnerabilities in security protocols to extrapolate confidential customer information that can be used to launch fraud attacks on other channels.
As many organisations have invested heavily in technology like voice biometrics and two-factor authentication, committing fraud through internet and mobile banking has become more difficult than other channels. To circumvent these security barriers, fraudsters often turn to bankโs contact centres to run reconnaissance programmes to try and collect useful information on potential victims. Since many banks rely on knowledge-based authentication (KBA), fraudsters can easily bypass security controls and leverage the Interactive Voice Response (IVR) systems or even online chatbots to collect sensitive information about their target. These can be used to socially engineer agents and access customer accounts, allowing fraudsters to commit fraud on online and mobile more easily.
Smart solutions
Social engineering of contact centre agents has become a fast growing threat for banks. So whatโs the solution? To address this, agents should be properly trained to help them spot when theyโre being manipulated and how to respond. The challenge for many agents though is that theyโre also being trained and incentivised to put the customer first and provide the best customer service. It can sometimes be difficult for them to resist the pressure when theyโre being targeted by a skilled fraudster.
To counter this, organisations can also add an extra layer of security to prevent fraudsters from harvesting sensitive customer information from the IVR and then using that information to deceive agents and take over customer accounts. When a customer makes a telephone call to a banking contact centre, the call is associated with a variety of metadata, known as call signalling. By examining this information, you can detect different features of the calls that might suggest suspicious activity. This can range from spoofed numbers, the type of call, whether itโs traditional public switched telephone network (PSTN) or voice over internet protocol (VoIP), or whether thereโs a high volume of calls from a withheld number.
This smart technology can analyse more than 200 features derived from carrier-level call signalling data, enabling banks to identify high risk telephone numbers before calls are answered. This ensures threats are quickly spotted and can be resolved by the bankโs fraud operations teams, before the victim loses any funds.
โDowngradingโ our status
As fraudsters become smarter and more sophisticated and the number of scams continue to rise, without immediate action, Britainโs status of โbank scam capital of the worldโ will remain indefinitely. Protecting customers from significant financial losses is only possible by detecting and stopping fraud early in the attack cycle, in the contact centre. To achieve this, banks’ customer service and fraud teams must collaborate to make the fraudstersโ job as hard as possible.
As banks have a responsibility to their customers to enhance their security and thwart fraud attempts, they should explore whatโs available on the market and implement the right tactics and technologies to do so. Only then do we have any hope of countering fraud, protecting customers and downgrading our status of โbank scam capital of the worldโ.
