Security incidents, namely fraud and cyber attacks, are now commonplace for companies across the globe as more and more information moves online. With 82% of business executives worldwide experiencing a fraud incident in the past year, compared to 75% in 2015, according to the
Kroll Annual Global Fraud and Risk Report, prevention will be key going forward.
The threat is realWhile theft of physical assets is the most common type of fraud within the financial services sector (39%), followed closely by vendor, supplier or procurement fraud (32%), according to
hedgeweek, cyber crime is intensifying at an alarming rate. In fact, 89% of financial services executives surveyed in Kroll’s
Fraud and Risk Report have experienced a cyber incident over the past year. “Data deletion, or loss due to systems issues,” was top of the list at 30% – with 25% experiencing “data deletion by a malicious insider” – followed by “email-based phishing attacks” or “virus or worm infestations” (both 27%),
hedgeweek reports.
“It’s becoming an increasingly risky world, with the largest ever proportion of companies reporting fraud and similarly high levels of cyber and security breaches,” says Tommy Helsby, co-chairman, Kroll Investigations & Disputes. “The impact of such incidents is significant, with punitive effects on company revenues, business continuity, corporate reputation, customer satisfaction, and employee morale.”
With these incidents becoming almost commonplace, Helsby stresses that “organisations need to have systemic processes in place to prevent, detect, and respond to these risks if they are to avoid reputational and financial damage.”
hedgeweek article
Technology is keyDigital market research firm Juniper Research predicts that online fraud will reach $25.6bn in 2020, a staggering increase on $10.7bn in 2015. “A reason for this is that the amount of data that needs to be processed and analysed now is overwhelming,” says Nikita Ivanov, founder and chief technology officer, GridGain, writing for
bobsguide. “The solutions that have been designed to automatically verify, analyse, and audit transactions to detect and prevent the fraudulent activity cannot handle the volume.”
89% of financial services executives have experienced a cyber incident over the past year
Statistical and multi-channel analysis, models and probability distributions, comparisons with user profiles, algorithmic analysis, data clustering and classification, and artificial intelligence and machine learning, are all preventive measures that companies can take to protect their assets, according to Ivanov.
However, “while all these technologies contribute to fraud prevention systems, they cannot overcome the inherent performance limitation of writing data to disks, typically the slowest activity in a modern computing solution,” he says. In-memory computing, which is “faster than any storage-based computing method,” is the key to overcoming this limitation. “Fortunately, today’s mature in-memory computing solutions now offer a full range of mission critical features and an affordable way to achieve the performance, scale, and comprehensive approach required to stop fraud in its tracks.” Financial services firms are increasingly turning to this method to enhance their fraud prevention programmes.
bobsguide article
Understanding the risksCyber crime is a major problem for the financial services sector worldwide, but how is this affecting the public? Financial Fraud Action UK reported over one million public incidents of financial fraud during the first half of 2016, a 53% increase compared to the same period in 2015.
“More than one in ten people have been a victim of financial fraud, one in ten have had one of their online accounts hacked, and a third of Brits say they are worried that they could become a victim of financial fraud at any time,” says
Aol’s Sarah Cole.
Understanding the different forms of attack is crucial, she says. As well as malware, phishing (via email), vishing (via phone) and SMiShing (via text message) are now widely used by fraudsters to obtain personal information and account details, alongside identification theft, card and cash machine fraud.
“Once people appreciate how easy it can be for criminals to piece together personal data gleaned from online profiles, such as those shared on social media, they tend to be more cautious about openly sharing their personal information”, says
Go Compare Money’s Matt Sanders. His advice? Protect account numbers and PINs, keeping them strong and secure; protect cards, sign the backs and keep them within sight at all times during transactions; protect personal information online using privacy settings; use antivirus software and passwords to protect devices; look for secure transaction symbols to stay safe online; and regularly review financial statements.
Aol article
The CISI offers cyber crime and financial crime qualifications and extensive CPD to keep you on the front foot against these major global threats that pose a serious risk to our industry. Find out how you and you firm can keep on top of this growing threat with the CISI.
Seen a blog, news story or discussion online that you think might interest CISI members? Email rosalie.starling@wardour.co.uk.