As originally seen in the ‘Fraud & Privacy Report’ published by Raconteur Media on 23rd July 2020 in The Times (UK).
As fraudsters find ways to exploit superapps, digital wallets and e-commerce platforms, businesses must adopt a new approach to fraud detection that is powered by artificial intelligence and encompasses the entire user journey.
While the first wave of digital fraud was caused by the migration of physical credit cards to digital payments, a second wave is now seeing fraud move to mobile applications.
By offering multiple products and services on a single platform, superapps and digital wallets risk complicating fraud risk management. In addition to payments, companies now have to deal with diverse types of fraud, such as account takeovers, fake registrations, promotional code exploitation, loyalty fraud and other reward-based loopholes.
Cybercrime was traditionally the domain of professional hackers who break into enterprises and governments to steal funds or personal data, or to cause reputational harm. But the arrival of a more digital-native generation has democratised their techniques, enabling opportunists to exploit online platforms, such as mobile apps, given their immense popularity.
Blinded by perceptions that mobile environments are more secure and being unaware of the malicious tools available to fraudsters, many businesses are unprepared. Such tools can change device profiles, manipulate physical or internet addresses, clone apps and even tamper with them.
Consumers are readily granting access to their smartphone data to enjoy a more personalised user experience, but by doing so they often become collateral damage in the ongoing hunt by fraudsters for financial gain.
“We have seen companies suffer tens of millions of dollars in fraud losses in a matter of days,” says Justin Lie, founder and chief executive of SHIELD, a global cyber fraud protection company that leverages over a decade of domain intelligence and artificial intelligence (AI) to help enterprises prevent fraud in real time.
“This can be business-ending for smaller startups or fledgling companies. 7-Eleven in Japan lost half a million dollars and shut down its new app offering mobile payments within a month of launch.
There is a new war being waged. Mobile apps require a different class of fraud detection and prevention solutions and tactics
“The more unsecured and profitable mobile landscape has drawn fraudsters who traditionally target e-commerce platforms. There is a new war being waged and the battleground is your smartphone. As a new attack vector ground, mobile apps require a different class of fraud detection and prevention solutions and tactics.”