Education key to foiling fraud

While the phenomenon of crisis fraud is not new, the transition to digital, the extended timelines of the pandemic, and the global impacts on individuals, organisations, businesses and regions have not been experienced before.

“At ANZ, we are heavily focused on detecting, preventing and disrupting fraud by leveraging our people, technology and partnerships.”The commercialisation of crime and fraudsters’ ability to go to market and leverage new technology is happening at a speed and scale not seen before. Criminals are scaling up, leveraging technology including artificial intelligence (AI) and social engineering. Financial institutions and their customers are dealing with a complex, fast moving and constantly evolving landscape.

While “phishing” emails and websites purporting to have COVID-related information are often just wrong or filled with conspiracy theories, for many a goal was to collect personal information. This personal information is then used to commit identity takeover-related fraud.

Identity theft and data theft, a key enabler of fraud, is when stolen identities are used to steal as much as possible, as quickly as possible. According to Experian, in 2020 the rate of new account credit card fraud attempts rose 48 per cent. This figure is expected to rise again in 2021.

Combined with the use of new payment methods and crypto currencies as the vector for value transfer, the ability to detect and prevent criminal intrusion reach has become more complex and time consuming.

But fraud is not only a financial crime. A report by the renowned thinktank Royal United Services Institute (RUSI) highlighted fraud should be considered and treated as a national security event. The research was UK-based but likely to be reflected elsewhere. In addition, the links between fraud and serious organised crime as well as fraud and terrorist financing are only now coming under increased scrutiny. In a globalised environment, collaboration and connectivity facilitating crime is the new norm.

Even more sophisticated

In this rapidly evolving environment, the recent Association of Certified Fraud Examiners (ACFE) International Fraud Awareness Week 2021 was heavily focused on the post-COVID world and in particular the future state as our work and living and work situations change and technology becomes even more sophisticated.

At ANZ, reflecting the threat landscape that we are now facing, we are heavily focused on detecting, preventing and disrupting fraud by leveraging our people, technology and partnerships. Internally we use systems including ANZ Falcon and raise awareness and increase the understanding of scams and business email compromise across our businesses and customer base to protect our community.

The latter is particularly important as data indicate criminals have moved away from direct attacks on financial institutions and now focus on targeting customers and their businesses. Experian’s research shows, by May last year, three-in-five fraud professionals said the rate of fraudulent activity had risen and 93 per cent expected it to get worse. This sentiment remains a year later, as highlighted in KPMG’s latest fraud survey.

Digitisation makes fraud more anonymous but its real-world impacts remain the same and the effects of fraud on customers are immense. The financial consequence of falling victim to fraud can last for months, even years, often preventing access to any further credit or loans until the issue is resolved.

Coupled with the psychological and emotional impacts, the need to protect yourself, your business and your community is clear. In particular, it’s vital for businesses to understand who they’re dealing with, especially given the acceleration of socially engineered scams and business email compromise in the past 18 months. Heightened emotions such as shame and embarrassment often accompany being a victim of a fraud and can impede prompt action and preventative measures such as holding funds or recalling a suspected fraudulent payment.

Education is critical

Combating the increasing sophistication of fraud requires a concerted effort across the spectrum of stakeholders including banks, regulators – and the public at large. Education is critical and high-profile campaigns are one component of the ongoing awareness raising necessary to help combat this scourge. People are a key enabler in the fight against fraud whether that is bank staff, customers or regulators.

ANZ operates a global security operations team who proactively scan and assess our services for cyber-related incidents and also operate a number of threat defence and mitigation capabilities. We have a sophisticated intelligence sharing capability and work actively with industry partners, law enforcement agencies and other private institutions in these circumstances.

There are dedicated teams at the bank to respond to scams in all major divisions. We have also partnered with ID Care, a not-for-profit organisation that supports victims of identity and cyber fraud, including scams.

Ahead of the upcoming holiday season, we expect the fraudsters to be out in full force. In the excitement of a lockdown-free festive season and anticipating supply chain constraints, online activity has increased significantly. Unfortunately, so will online fraud.

Cassandra Hewett is Group Head of Financial Crime & Money Laundering Reporting Officer at ANZ