- Only 50% of organizations have confidence in their ability to
stop scammers.
- Sixty-nine percent (69%) find it difficult to break a victim's
belief or trust in a scammer.
- Just four percent (4%) of FIs can alert customers to scams
involving impersonation of financial services employees within 24
hours.
ATLANTA, July 9, 2024
/PRNewswire/ -- LexisNexis® Risk Solutions published a study
evaluating how financial institutions (FIs) detect and mitigate
authorized transfer scams, where fraudsters manipulate or deceive
account holders to transfer funds to them.
The study, Defend Against Authorized Transfer Scams,
finds that fraud risk and mitigation strategy leaders
at US financial services institutions understand the importance of
both detecting and mitigating scams effectively. However, they
exhibit lower confidence in their organizations' capabilities and
solutions for these efforts. While 81% of FIs prioritize mitigating
more scams to prevent customer financial loss, only 50% feel
confident in their ability to do so.
Fraudsters are highly skilled at coaching targets to complete
authorized transfer scams. They manipulate or deceive targets into
transferring funds to them through various means, such as the false
sale of goods, services or investments. They also use fraudulent
payment instructions and impersonation schemes, including posing as
romantic interests, fake businesses, charities, family or
friends.
"Scams, fraud and financial vulnerability are on
the increase. Meanwhile, consumers increasingly expect safer and
more secure interactions and transactions," said
Soudamini Modak, director of fraud and identity at
LexisNexis Risk Solutions. "FIs must analyze digital and
behavioral signals to implement better strategies for mitigating
scams across multiple channels. It's important FIs detect scams and
other fraudulent behavior without frustrating consumers by slowing
legitimate transactions and risking customers abandoning their
transactions."
Key Findings from the Study:
- Consumers hesitate to believe they are the target of a
scam. Sixty-nine percent (69%) reported that convincing
customers that they are the target of a scam is difficult. Many
organizations (72%) are trying to strike a balance between
confidently proving to a target that they are being scammed and not
divulging too much information.
- Alerting customers in a timely manner once some scams are
detected poses a challenge. Twenty-eight percent (28%) of FIs
flag scams involving illegitimate orders for goods, services or
investments to customers within 24 hours. However, only four
percent of FIs can alert customers to scams involving the
impersonation of financial services employees in the same time
period.
- Current capabilities and solutions are not enough to
mitigate scams. Two in three (64%) of respondents reported
challenges with their current solutions' ability to mitigate
authorized transfer scams. This generation of scams and scammers
requires additional systems for detection and the adoption of
advanced technologies that use data-based insights to assess payor
and payee risk, determine if outreach is necessary and attempt to
mitigate a scam before it concludes.
- Detecting target coaching, malicious transfers and
mitigating scams requires a comprehensive strategy. FIs are
taking a multilayered approach to scam detection and mitigation and
aligning upgraded capabilities with their overall goals for scam
detection strategy. Sixty percent (60%) of FIs that aim to enable
more confident outreach to customers understand that it is an
essential part of effective scam mitigation. Expanding automation
and implementing solutions to detect risky behaviors gives FIs the
confidence to identify a consumer as the target in a scam.
Download the Defend Against Authorized Transfer
Scams study.
Methodology
LexisNexis Risk Solutions commissioned Forrester Consulting to
conduct an online survey of 413 financial services directors and
decision-makers at organizations in the US to evaluate
fraud risk and mitigation strategies. Survey
participants included decision-makers in IT, operations,
fraud prevention, customer service, digital banking
and product management. Questions provided to the participants
focused on the current state and benefits of fraud
mitigation strategies, as well as the current state and challenges
of fraud risk. The study began and was completed in
September 2023.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data,
sophisticated analytics platforms and technology solutions to
provide insights that help businesses across multiple
industries and governmental entities reduce risk and improve
decisions to benefit people around the globe. Headquartered in
metro Atlanta, Georgia, we have
offices throughout the world and are part of RELX (LSE: REL/NYSE:
RELX), a global provider of information-based analytics and
decision tools for professional and business customers. For more
information, please visit LexisNexis Risk Solutions and
RELX.
Media Contact:
Ade O'Connor
+44 78 9091 8264
ade.o'connor@lexisnexisrisk.com
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