Banks and payment organisations are finding it difficult to manage online financial fraud in today’s connected and complex technological landscape, suggests a survey conducted by security specialist Kaspersky Lab and researcher B2B International.
A total of 130 banks around the world participated in the survey. In the responses, 38% of participants admit that it is increasingly hard to tell whether a transaction is fraudulent or genuine.
Commenting on the findings, Kaspersky Lab notes that the explosive growth of electronic payments (e-payments) combined with new technological developments and shifting business needs has forced companies to enhance the effectiveness of their business processes in recent years.
Often, this has been achieved by implementing e-flow systems for interacting with suppliers and clients. E-payments of all types have become so ubiquitous that it is impossible for businesses to completely avoid electronic transactions of any kind. With companies increasingly immersed in digital environments, ensuring business continuity and protecting themselves against cyber-threats will be crucial.
As the number of online transactions increases, so does the level of online fraud. Half of the financial services organisations surveyed believe that online financial fraud is growing, making it imperative that efforts are stepped up to protect their business and customers from cybercriminals.
A breakdown of the survey findings reveals that 41%of businesses have implemented an in-house cybersecurity solution and 45% rely on a third-party solution from their bank to mitigate the risks. Additionally, 46% of companies have either only partially implemented a solution against financial fraud, or have not implemented one at all. Among financial organisations, only 57% have a dedicated anti-fraud security solution.
Responses also suggest about half of the organisations operating in the electronic payments landscape use non-specialist solutions, which Kaspersky Lab notes are unreliable against fraud and show a high percentage of false positives. “The incorrect use of security systems can lead to transactions being blocked [and] the deviation of payments may lead to a loss of customers and, ultimately, profits. This is therefore a critical issue for every business,” it comments.
“Fraud itself is not the only problem, financial institutions need to reduce the number of false alarms in their systems to provide the best customer service possible.”
Ross Hogan, Kaspersky Lab’s global head of fraud prevention, commented: “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.
“The interdependence of the digital relationships between all financial services market players also means that if any one organisation in the value chain experiences a digital service issue – whether due to fraud, breach or cyber-attack – the damage can quickly spread to the other organisations in that digital financial service value chain.
“As the already high volume of customer demand for online transactions continues to increase, all companies (its customer facing digital platforms, infrastructure, data and employees) should be secure, convenient and prepared.”
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