The Changing Face of Fraud.

by | Aug 24, 2022

Fraud is on the rise, and companies are having to rapidly pivot operations, training and budgets to handle the uptick in fraud activity.

 

Enterprises across the world are learning to react to new, evolving forms of fraud that take advantage of increased reliance on digital operations and the vulnerabilities inherent in massive decentralised networks of people, trade, and banking. 

 

In this blog, we explore some of the topline effects of fraud across, and how they impact global and APAC financial businesses. 

We reached out into our network and sought feedback from some of DSC’s client base on their views on the state of global fraud. We were lucky enough to get the thoughts of Jimmy Fong, Chief Commercial Officer at SEON, and Dev Dhiman, Managing Director of GBG Plc.

We asked our client partners several questions about their thoughts about the rise in fraud within the financial, and wider, technical space.

Now-normalised fraud.

One of the most immediate lines of fraud-related feedback from both our clients was how normalised fraud risk now is across operational decision-making. 

Jimmy Fong, CCO at SEON, mentions the past two years, in particular, having “really opened the floodgates…with professional fraud rings hitting companies left and right in hopes of making fast money, abusing loopholes and circumventing existing defenses in place”.

 

This is echoed by GBG leadership – “identity crime and money laundering will continue to threaten” their industry on a more frequent and normalised basis”.


KPMG’s own recent Fraud Outlook summarises the key threats enterprises face in 2022 from fraud and cyber security inefficiencies, which includes “38% expect the risk of fraud committed by external perpetrators to somewhat increase in the next year”.

Post-pandemic fraud risks. 

When “half of small and medium enterprises see fraud as a major risk to growth”, the barrier to post-COVID growth can seem insurmountable. Our two interviewees agreed that this rise in fraud is a direct result of post-pandemic vulnerabilities coming to light. 

What we’ve seen at SEON is that many things were moved online without the appropriate anti-fraud or security measures in place, and criminals ruhed on the fact as if it were a gold rush”. 


This has been well reported across the cyber security and business media, for example, Experian’s Annual Future of Fraud Forecast noted that “ransomware will be a significant fraud threat for companies in 2022 (and we) predict…an uptick in two types of fraud: identity theft and synthetic identity fraud”.

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Recession-proof risk management.

With a recession looming, we asked our two client guests whether they felt the risk of fraud grows with impending financial disruption. 

 

Both of our polled clients felt it would, for one unique reason – the people committing the fraud are more enabled and more willing to go to extreme lengths to defraud companies of their money and data. 

 

Jimmy Fong noted that “recessions breed a new kind of criminal, one that’s more tech-savvy than the usual run-of-the-mill fraudster. All the big drivers for fraud are there: opportunity, motivation, resentment and rationalisation”.

 

Dev Dhiman agreed, saying “fraud rings are more organised and are no longer lone-wolf operations, and they will take advantage of emerging tech like digital account opening and BNPL”.

Where do the solutions lie? 

As PwC notes in their report Fraud Risk Management, “the best defense to this growing threat is strong and proactive risk management”. We feel that a large proportion of that proactiveness will be tied up in the people and leaders sustaining anti-fraud cultures. 

 

Dev Dhiman was clear in where he felt top-line fraud risk mitigation lay. “Collaboration is key in the fight against complex, organised crime. Savvy fraud managers understand the importance of working within an ecosystem to stay up to date with trends, and insights to ensure proactive defense.

 

Real-time decisioning (i.e. < 10ms), and the ability to handle billions of transactions with high TPS is essential. As is Privacy Enhancing Technology (PET), and capabilities including – automated behavior profiling, entity resolution, dynamic segmentation, network link analysis, and machine learning…(and) banks should look at all interactions along the customer journey…and identify how fraud control can overlay the entire (customer) journey”.

 

Jimmy felt tech could be the driving force for positive change, noting “the trick lies in disruptive tech – disruptive in the sense that it tries to “break” the business model of fraud by making attacks impossible to scale…targeting the weakest point of a fraud operation: laziness”. 

 

This echoes macro-mitigation efforts to reduce fraud. Global-spanning systems of support and antifraud, such as the Take Five to Stop Fraud grouping of major tech companies in the UK exemplify the approach to fraud taken by the biggest tech firms in the world. 

 

Need help in finding tech talents for a Singapore-based company? You can count on Datasearch Consulting to lend you a hand. 

While the talent market has undoubtedly become more competitive for both recruiters and HR professionals, we remain dedicated to connecting our partners with the right tech or IT talent. 

Connect with us at Datasearch Consulting for more information about our recruitment solutions for tech companies and functions.

Puvin is a Senior Director at Datasearch Consulting, a leading executive recruitment firm specialising in the Technology & Data sectors.

You can download their FREE comprehensive guide on “The Complete Guide to Navigating your Job Search – 5 Proven Steps to Secure your Ideal Fintech or Data Role”. Alternatively, you can view the Datasearch Consulting website or contact them directly on info@datasearchconsulting.com for a more detailed discussion.

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