20/08/2024 | News release | Distributed by Public on 20/08/2024 12:35
The Jack Henry™ 2024 Strategy Benchmark highlights the latest risk, fraud, and security trends that can impact your financial institution over the next two years.
Fraudsters and cybercriminals continue to fortify their arsenal, leveraging new tools like GenAI, deepfakes, and a wealth of stolen Personal Identifiable Information (PII) from numerous data breaches to defraud both financial institutions and accountholders at an accelerated rate.
As consumers increasingly fall victim to fraud - and in some cases, become unwitting or complicit pawns in the grand scheme of fraud attacks - financial institutions find themselves in a position where the accountholders they're trying to protect have become an opponent in the fight against fraud.
Legacy technology systems are not inherently modeled to identify these sophisticated fraud attacks. As a result, detection attempts are rendered inadequate - allowing scams to thrive and leaving you to suffer the consequences, including increasing fraud losses and decreasing reputational trust.
In 2024, the trajectory of scams is set to continue its upward trend - yielding increased profits for fraudsters on both domestic and international fronts.
As criminal entities recognize the lucrative potential of consumer-targeted scams, the use of additional social platforms and new methods to deceive consumers will increase - resulting in new complex schemes that consumers are unfamiliar with.
These challenges will put even more pressure on financial institutions to assume responsibility for consumer-initiated transactions.
In response, you should proactively seek control points within your current systems before considering the integration of new technologies. These scams involve transferring funds through money mule accounts, often using various forms of identity theft (like synthetic identities) to slip through your due-diligence efforts - prompting a meticulous review of accounts that previously cleared Know Your Customer (KYC) checks during consumer onboarding processes.
This renewed scrutiny will not only validate consumer identities but also assess their intentions. Simultaneously, you should continue to prioritize the ongoing battle against data breaches.
For hackers, your data remains a valuable resource for perpetuating both traditional and modern fraud schemes - allowing cybercriminals to exploit vulnerabilities within systems lacking updated software versions and financial institutions relying on easily-compromised security measures, such as usernames and passwords.
Security frameworks not based on a zero-trust architecture and least-privilege access will be susceptible to exploitation by cybercriminals, while traditional security methods' susceptibility to exploitation will come under scrutiny as financial institutions work to protect both consumers and staff from malicious actors.
You must acknowledge the pivotal role identity plays in both scams and historically traditional fraud.
Strategic investments in advanced technology geared toward identity will become imperative for banks and credit unions looking to protect themselves and their accountholders.
Technologies, such as behavioral biometrics, offer crucial insights into unique digital behaviors that can't be recreated by fraudsters. Access to this data allows for anomalies in online behavior to be easily identified, malicious actors to be removed from online sessions, and fraudulent transactions to be intercepted before losses can occur.
By replacing susceptible authentication methods, adopting a zero-trust framework, and employing least-privilege access, you're ensuring a layered approach to thwart the threat of cyberattacks - in turn, protecting both your financial institution and your accountholders while managing fraud risk.
Download the 2024 Strategy Benchmark to create effective strategies and compete more effectively.
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