Many financial institutions are unable to detect a cyberattack, according to new research from Kaspersky Lab and B2B International.
Reports Tuesday (Jan. 31) said the companies have released their joint analysis on the issue to find that more than a third (38 percent) of banks and payments organizations admit it is becoming increasingly difficult to differentiate between a fraudulent and genuine transaction.
The research points to the sheer volume in ePayments as one key factor as to why financial service providers are challenged to identify fraudulent transactions. The report found that half of financial service organizations believe online financial fraud is on the rise.
Business use of electronic payments is a major factor behind both the increase in ePayments volume, as well as the increase in payments fraud. According to researchers, 41 percent of companies say they have an in-house cybersecurity tool, while 45 percent said they still rely on a third-party tool, usually from their bank. Nearly half admit that their cybersecurity solutions are only partially implemented or that they have not implemented one at all.
Financial organizations, too, have a long way to go, with only 57 percent reporting that they have an anti-fraud security tool in place today.
Overall, the report noted, many of the businesses surveyed said they use non-specialized services to mitigate and detect payments fraud, which are unreliable and often show a high percentage of false positives, researchers added. This incorrect use of cybersecurity tools means many transactions can be blocked and lead to payments friction, which could ultimately lead to financial organizations losing customers.
“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,” said Ross Hogan, Kaspersky Lab global head of fraud prevention, in a statement. “The interdependence of the digital relationships between all financial services market players also means that, if any organization in the value chain experiences a digital service issue … the damage can quickly spread to the other organizations in that digital financial service value chain.”
Hogan added that, as the demand for online payments increases, financial service providers must be prepared to secure those transactions.