A new study from Juniper Research has found that annual online payment fraud losses from eCommerce, airline ticketing, money transfer and banking services, will reach $48 billion by 2023. That’s up from the $22 billion in losses projected for 2018.
The research group says that a critical driver behind these losses will be the continued high level of data breaches resulting in the theft of sensitive personal information. Juniper says fraudsters are using information gleaned from these breaches to move away from pure identity theft. With the global rise in instant payment schemes and a focus on transactional rather than behavioral risk, the study forecasts that money transfer would be particularly vulnerable, with fraud losses increasing by over 20% per annum to $10 billion in 2023 instead using fragments of real data to create new, synthetic identities.
“Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioral giveaways that indicate this type of fraud. Fraud management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up,” notes research author Steffen Sorrell.
What’s more, Juniper predicts that techniques practiced by the Magecart and Fin7 groups would become more common as fraudsters seek to create products from their knowledge. Here, the groups used a combination of malware and cross-channel approaches for criminal gain. The research group notes, as a result, more complex fraud would only become more common as, in effect, a ‘fraud-as-a-service’ economy emerges.
Juniper recommends a holistic approach to fraud prevention. The procurement of omnichannel fraud prevention services and a strategy to assess and mititgate risk from a cybersecurity perspective will be critical for effective fraud prevention in the near to medium-term.
Graphic courtesy of the MaxMind blog