Banking fraud is constantly evolving as conditions change, creating new vulnerabilities for banks and opportunities for fraudsters. Staying abreast of this moving target is essential if banks are to find solutions that can spot and prevent such scams, especially given the effects of the pandemic on the banking fraud landscape.
In its report Fraud in the Wake of Covid-19, published in December 2020, the Association of Certified Fraud Examiners found that 79 percent of respondents had seen rising fraud levels in the final months of 2020. Some 90 percent expect a further increase during 2021. The most serious areas of concern were cyberfraud, including business email compromise, where 85 percent of respondents reported an increase, and payment frauds, where 72 percent saw an increase.
Our review of Top Banking Fraud Types to Watch in 2021 highlights the common methods criminals use to defraud banks and their customers – something everyone should know about going forward. We classify the different types of frauds according to whether the payment is initiated by unauthorized or authorized parties. In our view this is the most relevant classification system to use, since this distinction directly affects the level of liability that banks face.
We also present recent case studies for the different fraud types, based on cases that have been detected and prevented by NetGuardians software in deployments with banks around