Banks and payment organisations are finding it difficult to manage online financial fraud in a connected and complex technological landscape. That is according to a survey by the IT security product company Kaspersky Lab and B2B International. A good third (38 per cent) of organisations admit that it is increasingly hard to tell whether a transaction is fraudulent or genuine.
The explosive growth of e-payments combined with new technological developments and shifting business needs has forced companies to enhance the effectiveness of their business processes in recent years. In many cases, this has been achieved by e-flow systems for interacting with suppliers and clients. E-payments of all types have become so ubiquitous that it is absolutely impossible for businesses to completely avoid electronic transactions Kaspersky says.
As companies become increasingly immersed digitally, ensuring business continuity and protecting themselves against cyber-threats will be crucial. As the number of online transactions increases, so does online fraud, with 50 per cent of financial services organisations surveyed believing online financial fraud is increasing. It is clear that financial institutions need to make every effort to protect their business and customers from cybercriminals.
In detail, 41 per cent of businesses have in-house cybersecurity and 45 per cent rely on a third-party solution from their bank to mitigate the risks. Also, 46 per cent of companies have either only partially implemented a solution against financial fraud, or have not implemented one at all. Among financial organisations, only 57 per cent have a dedicated anti-fraud security solution.
According to these findings, about half of the organisations operating in the electronic payments landscape use non-specialist solutions, which, according to statistics, are unreliable against fraud and show a high percentage of false positives. We should note that the incorrect use of security systems can lead to transactions being blocked. We should also note that the deviation of payments may lead to a loss of customers and, ultimately, profits. This is therefore a critical issue for every business. Fraud itself is not the only problem, financial institutions need to reduce the number of false alarms in their systems to provide the best customer service possible.
Ross Hogan, Kaspersky Lab Global Head of Fraud Prevention, says: “Considering the aggressive competition in today’s fierce financial services market and the extreme disruption from non-traditional providers, a trusted relationship between customers and their financial institutions is a decisive factor for the long-term prosperity of any company. The interdependence of the digital relationships between all financial services market players also means that if any one organisation in the value chain experiences a digital service issue (whether due to fraud, breach or cyber-attack, etc.), the damage can quickly spread to the other organisations in that digital financial service value chain. As the already high volume of customer demand for online transactions continues to increase, all companies (its customer facing digital platforms, infrastructure, data and employees) should be secure, convenient and prepared. It’s crucial, therefore, to use specialised fraud prevention solutions that will provide customers with the most convenient and safest service possible.”
