Is Covid-19 leading to a rise in fraud?
There has been an increase in phishing and smishing (using text messages) scams and identity thefts in the current scenario.
Fraudsters are also exploiting the downturn in interest rates and contacting unsuspecting consumers, offering ‘better products’, often tricking their victims into transferring money. Moreover, in some scams fraudsters pose as government entities, banks and healthcare providers to trick individuals to reveal their personal and/or financial information.
There has also been a rise in the use of video conferencing facilities, but some of these have been shown to have sub-optimal security standards, with instances of uninvited parties eavesdropping or even hijacking the conversations.
Why is tackling fraud important for the banking sector?
As the banking sector continues to embrace technology, fraudsters are becoming sophisticated and can swiftly adapt approaches to conduct criminal activities, which could result in significant losses for banks.
Technology represents a great opportunity, as well as a responsibility for banks, to cultivate the trust of their customers and manage the expectations of the regulators. Therefore, banks need to be more agile to respond to new threats and embrace new approaches and technologies to predict and prevent fraud.
With employees working from home amid Covid-19, the bank’s VPN servers have now become paramount and their security should be the key focus of IT functions. Most home networks lack the same level of security that exists at workplace, and this brings a great responsibility for the banks’ IT function to mitigate the cyber risk.
Banks are diligently working on cybersecurity awareness, but customers play a key role in the prevention and detection of fraudulent activity. More efforts are needed to create awareness for customers about fraud and scams.