Cybercriminals targeting online lending services
Financial organisations are under threat by cybercriminals looking to exploit alternative lending and payment models by taking advantage of the time delays inherent in reporting loan agreements to credit bureaus. This results in substantial financial gain for these criminals.
Financial organisations are under threat by cybercriminals looking to exploit alternative lending and payment models by taking advantage of the time delays inherent in reporting loan agreements to credit bureaus. This results in substantial financial gain for these criminals.
Research by ThreatMetrix has revealed that in 2016, one million online lending transactions were targeted by cybercriminals. Globally the total loss due to these transactions is estimated at £8 billion. The number is set to grow this year.
"This emerging trend in online lending fraud is the latest attack strategy being used by organised crime rings, driving a vast amount of cybercriminal activity within the financial services sector globally. And it continues to grow at great speed. The number of attacks specifically targeting alternative lending has increased by 150% since Q3 2016," said ThreatMetrix in its Cybercrime Report.
Some of the key points highlighted in the report were:
- • Nearly 122 million attacks were detected and stopped in real-time, an increase of more than 35% over the previous year.
- • Growth in attacks outpaced overall transaction growth, and the overall rejected transaction rate grew 15% — demonstrating heightened risk levels.
- • 45% of transactions come from mobile devices. Of these 55% relate to financial services. Mobile devices are becoming increasingly popular for transacting online.
- • Cross-border transactions are increasing. More than a quarter of transactions in the network are cross border, but these are approached with caution and are rejected more than twice as much as domestic transactions.
"Due to its surge in popularity, and fast transaction cycles, online lending has become a prime target for cybercriminals. Online lenders are under increasing pressure to adopt smarter authentication methods that leverage real-time, behaviour-based intelligence to accelerate genuine loans and prevent fraud," said Vanita Pandey, vice president of strategy and product marketing at ThreatMetrix.
Brazil, Egypt, Ghana, Jordan, Nigeria, Macedonia and US head the list of countries where this fraud originates from. An increase in online fraud has also been reported from emerging countries such as Tunisia, Ukraine, Malaysia, Bangladesh, Pakistan, Serbia, Morocco, Guadeloupe, Qatar and Cuba. Within these economies identity spoofing appears to be the most popular online threat.
"The fact that developing nations are becoming bigger players in the online fraud game demonstrates the spread of breached identity data to countries across the globe. Global data breaches are making stolen identity data globally available via the dark web, and this information is traded by organised and networked crime rings," said Pandey.
ICC Commercial Crime Services urges members to be aware of new developments in cybercrime and encourages them to avail from the range of services available to help prevent and protect against financial fraud.