There is mounting evidence to suggest that fraud is indeed increasing during the COVID-19 pandemic. BioCatch is now reporting that a full two-thirds of all financial institutions have modified their 2020 projections in response to the outbreak, and are now preparing to deal with higher rates of fraud than initially expected.
BioCatch called particular attention to the threat of new account fraud, including mule accounts. Cybercriminals are taking advantage of the disruption to evade detection, which is why twenty percent of all financial institutions believe that new account fraud will go up the most due to the pandemic, at least when measured against other forms of fraud.
Many of those new accounts will be mule accounts, which are used to launder money. BioCatch notes that mule account recruitment is up during the pandemic, since cybercriminals are deliberately targeting people who have lost their jobs or experienced some other form of financial hardship, and who are therefore susceptible to the lure of easy cash.
“Before the pandemic, we were seeing a lot of banks spending time addressing better detection of mules,” said Aite Group Research Director Julie Conroy during a recent webinar. “The uptick in mule recruitment will increase the importance of mule detection for a lot of institutions.”
Despite those concerns, a sizeable number of financial institutions (around one-third) do not believe they have the resources to deal with mule accounts. With that in mind, many institutions have changed their priorities as a result of COVID-19. Many employees may continue to work remotely even after the economy reopens, so banks may reduce their floor space and invest the savings in better security tools to protect their digital channels.
The challenge, according to behavioral biometrics specialist BioCatch, will be coming up with tools that stop mule accounts and fraudsters without making the experience worse for legitimate consumers.
“We need to move beyond point solutions that solve a specific problem and look at technologies that can distinguish between genuine and fraudulent activity regardless of the attack vector,” said BioCatch Market Strategy VP Ayelet Biger-Levin.
BioCatch has previously warned that account takeover fraud has also gone up during the pandemic.
May 15, 2020 – by Eric Weiss