The following article can be found on the blog page of the FMS website.
By Hilary Collins, Specialist, Publications and Research, Financial Managers Society
Automation has been used to improve fraud detection and prevent cyber breaches, but recent research from Pindrop shows that automation has also allowed fraud to flourish – especially voice fraud.
Voice fraud on the rise
Pindrop’s findings show that voice fraud – that is, bad actors accessing information and accounts using call centers and automated phone assistance – has risen 350% since 2013. In fact, between 2016 and 2017 alone, overall voice channel fraud increased by 47%. That’s one in every 638 calls.
Banks are major targets
Voice fraud increased the most at insurance companies, but banking services were close behind with a 269% rise since 2013. Between 2016 and 2017 alone, voice fraud increased by 20%. Credit unions weren’t targeted as often as banks, but 80% of credit union’s fraudulent calls came from within the country, unlike banks.
A rock and a hard place
Of course, financial institutions can’t stop using voice technology and other automated solutions even as threats continue to rise – the survey found that 88% of businesses believe that voice technology gives them a competitive advantage and improves the customer experience. Institutions will instead have to find ways to provide convenience and new technology to customers while keeping their data and finances safe.
It’s not going to change
Fraud attempts will only continue to increase. Not only is cybercrime more profitable than the drug trade, but constant high-level data breaches mean that almost everyone’s information is compromised. For many people around the world, attempting to get into institutions’ systems is a full time “job.” As financial institutions create new ways to help their customers manage their accounts and build new systems to protect those channels, hackers will also be busy – behind the scenes, looking for new ways to get in.