Digital fraud’s 20 percent rise motivates search for digital identity insights
The world has witnessed a hike in digital fraud during 2022, with attacks from cybercriminals rising 20 percent since the previous year, according to a new report from LexisNexis Risk Solutions’ Digital Identity Network.
The majority of them, around 3.5 billion have come from automated bot attacks which rose 27 percent compared to 2021.
Human-initiated attacks, however, saw a high increase of 56 percent as attackers targeted individual online transactions that usually offer full digital identity data. The volume of these types of attack reached 905 million with increasing numbers targeting mobile channels – the preferred channel for digital transactions.
The steep rise in fraud is connected to a rise in digital transactions during 2022, which went up by 24 percent year-on-year, primarily driven by the financial industry and e-commerce. The two industries have seen a 31 and 29 percent uptick in attacks respectively.
“Businesses remain vulnerable to transactional fraud during this time of accelerated digitalization,” says Stephen Topliss, vice president of fraud and identity strategy for LexisNexis Risk Solutions. “Despite heightened regulatory scrutiny, technological innovations and higher public awareness, there are persistent challenges in preventing fraud.”
The LexisNexis Risk Solutions Cybercrime Report is based on attacks detected by its Digital Identity Network, which processed 92 billion transactions in 2022.
The most common fraud attempts in 2022 include third-party account takeover, third-party chargeback fraud, scams and first-party fraud. Certain types of fraud are more prevalent than others in particular industries and regions.
The Asia-Pacific (APAC) region had the largest number of third-party account takeovers while scams predominate in Europe, the Middle East and Africa region (EMEA). North and Latin America, on the other hand, has been battling with third-party chargebacks with North America also witnessing a significant number of true identity thefts.
Even countries that have historically seen lower rates of cyber fraud, such as Singapore, are seeing more attacks, the report notes.
The rise of certain technologies is also fueling the cybercrime wave: Payment methods such as digital wallets, QR codes and peer-to-peer transfers have seen an explosion in popularity, particularly in the Asia-Pacific region. Criminals have been fast to exploit the trend with attacks on digital payments rising 27 percent year-on-year.
“As fraud levels and its sophistication increase, relying on multi-factor authentication alone as a defense is inadequate in today’s digital world,” says Topliss. “Addressing the latest scams requires targeted machine learning models that can consume the latest digital intelligence insights, behavioral biometrics signals and mule account indicators.”
LexisNexis Risk Solutions stepped up its biometrics portfolio last year with the acquisition of BehavioSec.