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Banks Tighten Grip on Fraud, Although Threat Remains ‘Ever-Present’; SEON Reveals

Fraud prevention software provider SEON has released its latest ‘Global Banking Fraud Index’, highlighting that banks are slowly gaining more control over fraud – although attacks still pose a significant threat.

As banking experiences turn fully digital, fraudsters continue to find new ways to facilitate financial attacks and bypass protections. In its most recent report, SEON analysed the cost of this fraud to banks and other financial institutions around the world in 2023.

It has emerged that the number of monthly fraud attacks on banks earning more than $10million in annual revenue has consistently increased year-on-year. Likewise, the report highlights that 84 per cent of companies with revenues of $1billion or more have had more than 100 payment accounts targeted by fraud in the past year.

Meanwhile, around 36 per cent of all financial institutions experienced card fraud in 2022, which is a 26 per cent increase from the year prior. US lenders reported that 75 per cent of all fraud losses were related to consumer phishing, with other financial services reporting those cases at 66 per cent.

Despite so many accounts being targeted, only 65 per cent of companies experienced fraud in 2023 – the lowest rate since 2014. This suggests that, while numbers remain at a high level and substantial progress still remains to be seen, we may well be seeing the beginning of banks tightening their grip on fraud. However, it is clear that problems related to fraud are far from being solved, and losses could continue to plague banks and financial institutions for a long time in the future.

Despite a particularly difficult year for banking, the value of the global neobank market rose nearly $20billion in 2022.

Fraud: ‘an ever-present threat’

Tamas Kadar, CEO and co-founder of SEON, offered his view on the report’s findings. Kadar explained: “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.

“If this doesn’t happen, institutions risk monetary and reputational damage because of fraud. This is an ever-present threat, with 71 per cent 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 neobanking sectors with new tools to fight back against the fraudsters.”

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