January 18, 2018
We’ve polished up the crystal ball and conjured some prognostications for online fraud in the new year.
First the good news. If you’re a career fraud fighter, congratulations! You picked a growing field rich with opportunity for stimulation and advancement, as well as both financial and moral rewards.
Also, authorities in the US and around the globe are increasingly successful at busting fraud and other illicit cybercrimes. Nefarious Dark Web marketplaces are being shuttered and their operatives prosecuted, although this is causing many fraudsters to “ground hog” and later pop up elsewhere on the web on smaller marketplaces or individual web storefronts.
Then there’s more good news associated with Bitcoin’s dizzying freefall. This is causing Dark Web hackers to scramble for other ways to monetize their schemes, often through new forms of cryptocurrency. A bursting of the cryptocurrency bubble may make it harder for fraudsters to “collaborate” and slow the pace of buying and selling the weaponized data—stolen credit cards, identities, login credentials and more—that are fueling the surge in fraud.
Next, we’ll see more and better advances in machine learning and artificial intelligence (AI) enlisted in the battle against fraud. In addition, permanent and unique digital identities will become more prevalent. In fact, the UN and World Bank have teamed up to launch a program to provide everyone on the plane with a legal, digital ID by 2030.
Finally, we’re seeing a new role rising to prominence in corporate America. Just as today’s CIOs were once IT nerds banished to “data processing” and considered a back-office function, the prevalence and impact of fraud has led to the advent of the Chief Fraud Officer (CFrO) to work alongside other top “C-level” executives in boardrooms across the country.
Now for the bad news. The fraud forecast for 2018 is grim. Fraud has been growing at a quickening pace for the last quarter of a century and it’s not slowing down yet. Online fraud losses are projected to top $30 billion this year. That’s more than the Gross Domestic Product of many countries, including Paraguay, El Salvador and Nepal.
Here are Kount’s “dirty dozen” predictions for fraud in the 12 months to come, in no particular order:
- mCommerce (mobile) fraud will outpace eCommerce fraud…again.
- The Dark Web will grow like an expanding universe and continue to provide a safe haven for hackers to concoct fraud schemes, launch attacks, and monetize their gains.
- Data breaches will likely increase in frequency and size, although it’s hard to imagine a breach larger than the 3 billion Yahoo accounts that were compromised in 2013 and 2014.
- Person-to-Person (P2P) payment systems will result in more fraud losses.
- Application fraud will jump from 80 million fraud attempts to more than 150 million new account opening fraud attempts.
- Voice technologies are changing the rules of eCommerce and sending shock waves through IT departments with biometrics hacks making headlines.
- Global eCommerce will expand at a rapid pace, largely driven by a sharp rise in mCommerce across Asia.
- Organized fraud operations in the US and abroad will grow and launch even more sophisticated attacks with increasing concerns over state-sponsored meddling in the affairs of sovereign nations.
- The IoT (Internet of Things), with a proliferation of connected devices, will open unexpected gateways for hackers to penetrate unexpected aspects of our lives.
- Omni-channel shopping apps that allow consumers to shop whenever and wherever will provide hackers with more seams to exploit from phishing campaigns to MITM (Man-in-the-Middle) over unsecured wireless networks.
- Hacking training and resource libraries will be more abundant and easily available, especially on the Dark Web.
- Ordinary folks will become “the hacker next door” as simple fraud schemes will be too tempting to resist and increasingly easy to pull off.
What to do? Why not take a few minutes to view Kount’s webinar The Future of CNP Fraud: 2018 Strategies. Fraud experts will discuss dynamic strategies and solutions to fight card-not-present fraud and offer insights into:
- The dark web and underground market that fraudsters use
- The evolution of eCommerce fraud detection
- The advancement of dynamic risk scoring
- The benefits of behavioral biometrics