Categories: Fraud Prevention

Financial Crime Fighters Unite Against Cybergangs

Not unlike the Terminator, fraudsters never seem to sleep or stop in their reprehensible pursuits. Some work in rings and syndicates that span the globe, and they take theft seriously. So must good actors.

PYMNTS’ July 2020 Preventing Financial Crimes Playbook, done in collaboration with NICE Actimize, examines the cybertheft menace from a variety of angles, with an eye on COVID-era scams.

“The COVID-19 pandemic is making the threat of financial crime worse,” states the new Playbook.

“Fraudsters are exploiting individuals’ economic uncertainties and fears to commit financial schemes, with many posing as bank officials and attempting to steal personal information such as account numbers and passwords. Experts believe cyberattacks against the financial industry have risen by more than 238 percent between February and April, forcing Americans to worry more about cybercrime in addition to the pandemic’s effects on the country and COVID-19 itself.”

Shielding companies and their data from invisible attackers is at the heart of prescriptive measures outlined in the latest Preventing Financial Crimes Playbook.

Better Together

As if hackers and data breaches and everyday card theft weren’t already off the chain, along comes COVID to embolden criminals and provide them with the cover of chaos to ply their trade. The financial industry is responding with innovation at the individual company level, but also collectively, with financial institutions (FIs) teaming up.

“Banks and trade associations are working together on new cybercrime prevention initiatives. A conglomerate of 31 FIs and trade groups, including the American Bankers Association (ABA) and the Bank Policy Institute, recently announced the creation of the Cyber Risk Institute (CRI), which aims to create cybersecurity standards and strategies by promoting a common language for cybersecurity risk assessments,” the Preventing Financial Crimes Playbook states. “The group also intends to develop the Financial Services Cybersecurity Profile, a list of cybersecurity guidelines for FIs to follow.”

It's fighting fire with fire, in a manner of speaking. In other words, the financial industry — long suspicious of sharing anything with competitors — has had enough and it’s ready to work together. Like crooks do.

“A recent study from the American Bankers Association found that losses from fraud attempts against bank deposit accounts totaled $25.1 billion in 2018, a jump from the $19.1 billion lost in 2016,” per the Playbook. “Fraudsters often work together on these schemes, participating in organized cybercrime rings where they can buy and sell fake identities and swap trade secrets and tactics.”

‘The Value Of The Collective Intelligence’

Are fraud-fighters winning? The short answer is “yes” — for those that team up and tech-up properly.

“[The year] 2020 has reinforced the critical need for financial institutions to be agile. With each fraud attack, we see more sophisticated approaches that require advanced analytics to effectively identify fraud in a continuously changing payments environment,” Yuval Marco, general manager of fraud and authentication at NICE Actimize, told PYMNTS.

“We know fraudsters are innovative and organized, he said. “Therefore, FIs can’t fight fraud in silos.”

“This requires a marketwide view of risk analytics to adapt faster than fraudsters. At NICE Actimize, we use advanced machine learning techniques to automate the value of the collective intelligence for our clients. This provides models based on a portfolio view, industry-based reports, and enablement of intra- and inter-tenant collaboration. Our clients are able to move from a reactive to a proactive mode, knowing they are protected from emerging frauds ahead of time based on automated learnings from other FIs.”

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Banks, corporates and even regulators now recognize the imperative to modernize — not just digitize —the infrastructures and workflows that move money and data between businesses domestically and cross-border. Together with Visa, PYMNTS invites you to a month-long series of livestreamed programs on these issues as they reshape B2B payments. Masters of modernization share insights and answer questions during a mix of intimate fireside chats and vibrant virtual roundtables.

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