It’s time for a wake-up call if you believe that 2023 will see a reduction in online fraud. Cybercriminals never alter their stripes, only their methods.
Andy Renshaw, Senior Vice President, Product Management at Feedzai, the industry leader in using artificial intelligence to combat financial crime, presents his top five predictions for fraud in 2023:
More frauds will be committed due to economic uncertainties & speedier payment systems
Traditional and effective fraud techniques like account takeover (ATO) operations have become more challenging. The threat actors currently have two key advantages working in their favor: economic uncertainty and developing speedier payment technologies.
People are more susceptible to falling for scams when they are insecure or desperate about their financial situations. Apart from modifying their methods quickly, these scammers are getting good at understanding the economic environment as well. You get a perfect storm when you combine this with the capacity to move money with only a few touches on the screen, thanks to the development of speedier payment systems.
People who are in a desperate situation may resort to fraud
First-party fraud is on the rise with every economic crisis. If a recession strikes again, we anticipate both this trend to continue and an increase in second-party fraud cases. With responsibility shifting to banks, consumers may give their information to others to receive a refund for a scam that never occurred, while others may participate in money-mule schemes and permit launderers to access their bank accounts.
We also anticipate a surge in “friendly” frauds like family members using a relative’s trust to access their money or one family member allowing another to use their personal information to apply for a loan/credit card.
Technological advancements will make “deepfakes” increasingly more believable and scalable
Deepfakes have been increasingly used for fraud during the past year, and this will continue in 2023 as well. Over the coming 12 months, generative artificial intelligence technologies that mimic a person’s conversational and typing patterns will help improve this kind of social engineering.
Through the use of favored emojis and the ability to impersonate a person’s “speech”, fraudsters can convince victims to fall for schemes like CEO fraud or invoice fraud.
Social media sites will become “fraud-as-a-service” tools
Elon Musk’s Twitter takeover has been a burning topic. The verified blue check marks may now be purchased, turning the micro-blogging site into a scam haven.
Twitter is not the only platform used for committing fraud. Scammers spread their games widely through the use of social media sites. 70% of scams start on social media, e-commerce, or dating websites, according to at least one large UK bank. If social media platforms are not controlled, they will effectively develop into “fraud-as-a-service” platforms.
Lesser crypto investment fraud due to scandals
But scammers will find another method. FTX’s demise has accelerated the crypto winter. In 2023, there will be fewer cryptocurrency scams as investors start looking more closely at the market. Despite the heightening risk factor, the crypto sector will still draw in new investors.
And even though crypto’s appeal may be waning, there are still many other investment frauds to promote. Fraudsters may entice investors into phony stock, gold, or other commodity-related scams.