The amount of money lost to fraud through online account takeovers amounted to $16.9 billion in 2019, Pymnts.com has advised. The report, published 9th July 2020, stated that Financial Institutions “lost 72% more to account takeover schemes in 2019 than in 2018.”
Despite advancements in biometric identification methods being readily available, 96% of all Financial Institutions rely on username and password authentication. Pymnts.com reports that the reliance this form of identification has led to an 88% increase of new credit card account fraud between 2018 and 2019. In 2018, the damage caused by digital fraud amounted to 3 trillion dollars.
“There is growing evidence to suggest that fraudsters may be particularly well-equipped to beat authentication measures that leverage users’ personal details.”
This figure is expected to grow as phishing scam reports increased between late February and late March during the height of the Covid-19 pandemic.
Account takeovers continue to be particularly problematic for FIs, and a recent report highlighted the importance of adopting more advanced authentication measures to help defend against them. Phishing schemes and data breaches enable fraudsters to steal consumers’ usernames and passwords, allowing them to log into victims’ accounts without drawing FIs’ attention. The findings suggest that banks need to step up their security efforts and adopt methods like biometric authentication. Such solutions can allow mobile banking users to authenticate themselves by scanning their fingerprints on their phones, for example.
With 71% of consumers saying they have a greater confidence in financial institutions who use behavioural biometrics, this should apply a positive pressure on Financial Institutions to up their authentication. Until then, we can expect consumers to rely more on the security of cash over the limitations of digital payments in a world of cybercrime.