Cybercrime Report: 7 Trends in Online & Mobile Banking Fraud

Posted April 2, 2019

Cybercrime Report: 7 Trends in Online & Mobile Banking Fraud

The financial services industry saw mobile account login attacks surge 107% in the second half of 2018, according to data captured in our latest cybercrime study. This could hint at early warning signs that fraudsters are shifting focus to mobile attacks and testing the waters in different types of mobile and online banking fraud in 2019.

According to the new H2 2018 Cybercrime Report from ThreatMetrix, banks and other financial institutions experienced 37% growth in account takeover attacks made from the desktop channel during the third and fourth quarter. But it’s that jump in mobile login attacks that could prove most troublesome in coming months. The report, which captures actual cyberattacks detected and interdicted within the ThreatMetrix Digital Identity Network from July 1 through December 31, is seen as a credible indicator for global cyberattack trends.

Among other things, the report suggests that security will increasingly become a competitive factor for financial institutions in the months ahead. It may also provide critical insight into attack patterns that have Washington, the US banking system, and other critical sectors on high alert. Key trends captured in the report include the following and more.

1. Mobile Attacks Are Growing Fast

Customers are increasingly opting to bank online, with a preference for full service mobile banking apps over desktop sessions in many regions. In fact, 67% of all transactions in the industry now come through the mobile channel, up 13% year-on-year. Given the spike in login attacks, especially in the US, Brazil, Canada and Italy, and cybercriminals have clearly noticed.

2. It Must Be Slick and Safe or Customers Will Move on to the Next

Consumers expect you to keep them safe without slowing them down. That puts the onus on institutions to walk that tightrope between maintaining robust security and still delivering a low-friction, streamlined customer experience. And now, they have to do it while managing the sometimes competing demands of privacy and regulatory reform in regions around the world.

3. ATO Isn’t the Only Scam in Town

Account login attacks may be up sharply, but so is the rate of fraudulent account creations. Here, stolen identity credentials are used to open fraudulent accounts that enable fraudsters to apply for loans, credit cards, and more. These attacks are up 35% in the last six months overall, and nearly 3 in 10 new account creations made via mobile device are fraudulent.

4. Fraudsters Ambushing the Americas

Financial transactions in South America are the most likely of all industries to be attacked, with more than 1 in 10 now fraudulent—a 38% increase year-on-year. Meanwhile, account creation fraud rates have surged 130%. In North America, ATOs are up 81% year-on-year, and up 211% for mobile. Globally, other ATO hot spots include France (up 199% year-on-year) and Japan (up 326% in just six months). For account creation fraud, they include Germany (up 66%) and China (up 105% for mobile). In India, 1 in 4 new account creations are now fraudulent—the highest of any region.

5. Mobile-Tethering Now a Key Fraud Predictor

Data captured in the report indicates desktop transactions made using a mobile hotspot are now 2.4X more likely to be fraudulent than those using fixed-line broadband. This helps fraudsters running emulators and scripts on desktops to hide their whereabouts. And thieves with tethered laptops can lessen the likelihood of detection when extracting funds close to a bank branch.

6. Fintechs: Low-Hanging Fruit for Fraudsters

Digital wallets and remittance players are prime targets for cybercriminals seeking quick monetization of stolen credentials. Same thing goes for fintechs serving underbanked populations in geographies where identity proofing is unreliable, including Asia, South America, and Africa. Today, 8.8% of fintech customer accounts are fraudulent, compared to 4.2% for traditional Financial Institutions.

7. The Growing Threat of Networked Cybercrime

One of the most disturbing new trends is the growing footprint of cross-organizational, cross-industry fraud. The same digital identities associated with confirmed fraud incidents are being used by more than one organization in banking and lending / banking and retail, for instance.

Stolen Identity Credentials at the Heart of Cybercrime Threats

At the heart of all of these threats: identity. As stolen identity credentials make their way around the world, look for a growing number of organizations to adopt modern, digital identity-based identity verification and assessment solutions capable of harnessing global intelligence to recognize both legitimate users and malicious forces leveraging stolen credentials. In financial services and retail, industry consortiums will add a layer of additional threat assessment capabilities to gain further traction as well.

To learn more about cybercrime attacks on financial services and other industries and insights on how to protect your organization, download a copy of the H2 2018 Cybercrime Report from ThreatMetrix

Mike Yeardley

Mike Yeardley

Senior Director of Product Strategy, ThreatMetrix

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