The growing sophistication of fraud is making it increasingly difficult for businesses to identify and defend against coordinated attacks.
Data from global cybersecurity provider Sis ID found that a single fraudulent bank account is used to target an average of 34 businesses. As of late October, the company had identified and blocked over 14,000 fraudulent international bank account numbers (IBANs) this year.
The findings point to the growing reach of organized criminal networks, which are deploying an array of tactics.
“Fraudsters skirt detecting by spreading their attacks over multiple organizations,” said Jennifer Pitt, Senior Fraud Management Analyst at Javelin Strategy & Research. “This is true for many types of financial crimes, including account takeover, new account fraud, and scams.”
“Fraudsters often use the same fraudulent accounts or identities until they are caught,” she said. “At that point, they quickly switch to one of the many other fraudulent accounts or identities they’ve created in anticipation of successful fraud controls.”
Identifying the Players
This threat underscores the importance of accurate authentication. Yet verifying has become challenging in a digital-first environment, where e-commerce, mobile, and card-not-present transactions are commonplace.
The challenge is compounded by the expanding reach of criminal networks, which can involve multiple parties across a single fraudulent transaction.
“Being able to identify the sender and receiver as well as any counterparties or intermediaries of the transaction is crucial to identifying all the players in an organized fraud ring, as well as potential victims that are being used as money mules,” Pitt said.
Connecting the Dots
Identifying the full scope of an organized fraud operation can be difficult when institutions are working with only their own data. Greater information sharing could connect the dots across businesses and expose patterns that may otherwise go undetected.
When organizations share fraud data, they can more quickly identify when the same account is being used to target multiple businesses. This visibility can help institutions connect seemingly isolated incidents and better pinpoint when they may be part of a coordinated fraud operation.
“For too long, fraud professionals have been operating in silos,” Pitt said. “What is needed is network intelligence and information sharing. If organizations fail to share information with each other, fraud is often not caught until it’s disputed by the customer.”
