More than just a number – The human side of bank fraud and scams

Article by Richard Booth, Vice President of Sales, APAC at BioCatch

One of the biggest trends we’ve been witnessing in 2023 is the rise of scams. Despite greater awareness in educating the public, many still fall victim to such threats.  That is because scams are evolving more sophisticatedly, making it difficult for individuals to identify scammers under pressure.

The latest tactic is spoofing, which is when scammers impersonate banks and businesses by falsifying the information sent to an individual’s caller ID to disguise their identity. Scammers have been successful on this front because victims are more likely to pick up the phone if they recognize a local number. Scammers can easily create a phone number and caller ID of their choice, and once the victim answers the call, the scammers attempt to obtain sensitive information.

Once the victim realizes, they have been scammed, it is unfortunately too late for them to cancel the transaction and they are left with despair. Often, it is not just financial loss that victims experience, but unwelcome worry and stress from having a significant amount of their savings disappear overnight. Victims and their families may struggle with their cost of living finances and more. It is a mental and emotional loss that victims experience too.

In Singapore, scammers have successfully impersonated the Singapore Police Force (SPF) and government agencies, convincing victims to provide personal information and to transfer money to third-party bank accounts. Victims would receive calls from the first scammer pretending to be a bank officer and allege that the victim’s bank accounts had transactional issues or were involved in money laundering. The scammer would then transfer the call to a second scammer on the pretext of aiding the victim, pretending to be an officer from SPF for example, and provide a link for the victim to fill in their personal and banking details. In such instances, can victims be blamed for falling into the traps of scammers, when their scams have grown more sophisticated? Since January 2023, SG$1.9 million have been lost to such scams in Singapore.

With rising rates of scams, banks and telecommunications companies are facing harsh scrutiny and pressure from the public to tighten their security measures to better protect their customers.

Fraud and scams: The urgency for businesses to upgrade their technology

It is paramount for banks and telecommunications companies to invest and upgrade to the latest technological security infrastructure. With appropriate investments into technology that is suitable for the business, financial institutions and telecommunication companies have a fighting chance at keeping scams at bay. Investing in real-time threat intelligence like behavioral biometrics is crucial in aiding businesses to identify scams in real time. It utilizes analysis patterns to understand how a bank customer physically and cognitively behaves in the digital channels so when banks leverage this technology, it builds a profile of what normal behaviors look like and set up parameters to identify risky behaviors.

From how a person types on a keyboard, moves their mouse, taps on their mobile screen, or swipes in an app, a bank can determine if this is the original account owner acting normally or if it is someone acting under pressure indicating an unusual behavior. The technology can identify discrepancies like someone taking instructions to move money out of their account from a third party and alerting the banks, which is a key component to catching scam activities.

Fraud and scams: Receiving immediate behavioral insights to manage risks

Receiving immediate behavioral insights to manage risks is extremely valuable in today’s climate. For example, technology like behavioral biometrics continuously analyzes an online user’s physical and cognitive behavior throughout the entire digital session. This capability provides real-time alerts during sessions that are deemed risky or unusual behavior. This extra layer of security is much needed in today’s scam landscape allowing banks to verify with customers on the pending transactions.

This technology unleashes the power of continuous predictive analysis and identifies risks before it even emerges, focusing on risk management and further enhancing user experience. Real-time protection is essential for this type of crime and that is something that behavioral biometrics specializes in which allows banks and other financial institutions to better aid their customers to identify scams. Especially by establishing risk scores that highlight the degree of risk associated with a session or activity. By building out the risk scores, the fraud-detecting teams can receive insights in real time and take the necessary precautions to warn the customer.

How can financial firms and telecommunications further their measures

The first thing financial firms and telecommunications can or in this case, must do is invest the necessary resources in the appropriate technology that provides real-time threat intelligence. Tools like behavioral biometrics will help these organizations to stay on top of the increasing scams and aid customers in identifying scams better.

It will also be beneficial for these organizations to set up their own fraud detection teams whose main job is to solely focus on scams and operate this technology. This will enable the teams to respond to any abnormal activities they notice and make optimal decisions immediately.

Spoofing is not a phenomenon that is happening only in Asia, it is affecting Australians as well who are receiving calls from scammers pretending to be their banks and government agents. Many businesses have taken precautionary measures for example National Australia Bank has blocked its phone number preventing scammers from impersonating them. This is another approach that more businesses can undertake to protect customers.

As we continue to tackle fraud and scams, organizations need to understand the key role they play in this ongoing fight and the urgency required to invest and upgrade to the appropriate technology. This will be especially useful in safeguarding vulnerable members of the public like elderly citizens or naïve young adults, preventing both emotional trauma and financial losses. On that front, customers need to understand this is a shared responsibility as they too play a pivotal role in being more vigilant to scams.

The view in this article is that of the author and may not represent the views of Tech Wire Asia. 

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