Despite better banking oversight, fraud remains a real threat to the future

By Puja Sharma

As the world turns increasingly towards fully digitised banking experiences, fraudsters are finding new digital lockpicks to crack the electronic locks they face when accessing, buying, and exchanging money online.

Online fraud and financial crime prevention platform, SEON has released its latest ‘Global Banking Fraud Index’, which analyzes the cost of fraud to banks and other financial institutions around the world in 2023.

As the world turns increasingly towards fully digitised banking experiences, fraudsters are finding new digital lockpicks to crack the electronic locks they face when accessing, buying, and exchanging money online. Now, online fraud and financial crime prevention platform, SEON has published its latest ‘Global Banking Fraud Index 2023’, which breaks down the biggest banking fraud trends affecting the market over the past 12 months.

From the specific methods, locations, and actions that get employed, as well as the overall impact that fraud is having on the banking sector, SEON’s comprehensive index of fraud threats in the banking sector is now available to read for free on the company’s website. Though most data sourced refers to UK and US sources, SEON’s report also includes insights into fraud trends and neobank adoption rates around the rest of the world.

As the report indicates, the number of monthly fraud attacks on banks earning more than $10 million in annual revenue has shown a consistent increase year-on-year. Likewise, the report highlights that 84% of companies with revenues of $1 billion or more have had more than 100 payment accounts targeted by fraud in the past year. Despite this, only 65% of companies experienced fraud in 2023, which is the lowest rate since 2014.

Speaking on the new report, Tamas Kadar, CEO and co-founder of SEON said: “It’s been an interesting year for the banking sector, but despite a few bumps in the road there’s clear evidence the industry is moving in the right direction. However, to ensure this momentum can be sustained, those working within traditional banks, as well as neobanks must be highly vigilant about the growing risks associated with fraud. the

“If this doesn’t happen, institutions risk monetary and reputational damage because of fraud. This is an ever-present threat, with 71% of financial institutions reporting a security breach from Business Email Compromise last year alone. Thankfully, as well as compiling an index of today’s fraud pain points, companies like SEON are also on hand to provide businesses in the banking and neo banking sectors with new tools to fight back against the fraudsters.”

Key highlights:

• The value of the global neo bank market rose nearly $20 billion over 2022 despite one of the most tumultuous years in banking history.
• Around 36% of all financial institutions experienced card fraud in 2022, which is a 26% increase from the year prior.
• US lenders report that 75% of all fraud losses are related to consumer phishing, with other financial services reporting those cases at 66%.