Fraud is the fastest growing business on earth – no joke

Image credit | Elnur Amikisjiyev

If you add up all the fraud statistics that flood in from the laptops of PR companies you would either unplug every device you own and/or think about a new career in fraud prevention.

For the last few years we have tended to concentrate on telecommunications fraud, simply because digital fraud is enabled by telecoms networks.

Telecoms fraud is big enough, now standing at $28.3 billion, according to the fraud association, CFCA. This figure is borne out by statistics from Europol and TrendMicro (who put it a little higher than the CFCA number).

One aspect of the CFCA research is how quickly the fraud issue has gone from ‘annoying, we should do something about it’ to attracting huge investment and ‘we have a real, current threat to our business’. According to the CFCA, 45% of fraud departments are less than seven years old and only about a quarter have been around for 20 years or more.

The top fraud method at the moment is international revenue share fraud where fraudsters wait until settlement logs between operators are out of date and then dive in for a little light money laundering. The top trending threat is payment fraud.

Add the amount lost to fraud in telecoms to the amount that telecoms is investing in fraud prevention and the figures become even more shocking. AI as a tool to combat fraud will cost telecoms $15 billion between now and 2024, according to Juniper Research.

It is hard to quantify the total spend on fraud in telecoms, when you include people, premises, equipment, training and the like (and bear in mind that fraud prevention specialists are now in high demand and low supply) and the bill is fearsome. Multiply that across the whole technology/digital sector and you will need to lie down in a darkened room.

Worse still, ethical hackers say that of all the industries they work with, the technology sector has the most ground to make up. Of those polled in a 3,000 plus respondent survey by HackerOne, 18% said that the tech industry is falling behind in terms of its cybersecurity, followed by government (16%) and finance (14%).

Talking of payment fraud, if you want the bleak truth about this, Juniper Research is again happy to provide the gloomy news. Online payment fraud will exceed $200 billion over the next five years, according to Juniper. This covers companies in eCommerce, airline ticketing, money transfer and banking services. And if that was not enough, Juniper can also report that advertising fraud hit $42 billion in 2019.

There is, has been and will be a balance between digital progress and the fraud threat. The more we connect things the more vulnerable our processes and systems become (think 5G and the IoT). And, of course, the Cloud is where we are naturally storing data.

The Thales 2020 report on threats after digital transformation reveals that ‘half (50%) of all corporate data is stored in the cloud and nearly half (48%) of that data is deemed to be sensitive or confidential’.

It is also true that the traditional fraud methods are still popular. The 2020 Webroots report says that ‘phishing URLs encountered grew by 640 percent in 2019, that 1 in 4 malicious URLs are hosted on an otherwise non-malicious domain and 8.9 million URLs were found hosting a cryptojacking script’. In exchange for some personal details you can download the report here.

It is the conundrum of our time and we must continue to evolve and develop strategies for countering fraud threats. And we must take it seriously. The latest Verizon mobile security survey found that too many companies are sacrificing security to ‘get things done’ and, for many, this strategy does not end well. Many report breaches that have had a ‘significant’ impact.

The good news is that fraud is a common enemy and therefore the sharing of information is possible and already well managed.

The other possible good news is that if you are wondering about a second career, it might be time to consider fraud prevention – or fraud itself!

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