Addressing the Elephant in the Room: Managing the Escalating Risk of Fraud

Innovation and new technology are continually reinventing the payments landscape. Faster, simpler transactions enabled by digital transformation have resulted in a win-win for consumers and businesses. However, opportunities for fraud have also been accelerated, increasing risk as fraudsters rapidly adapt and evolve their tactics to take advantage of expanded channels and changing consumer behavior. 

Combating Rising Levels of Fraud

Advanced by COVID-19, the shift to digital channels has sparked a corresponding rise in fraud. More than half (51%) of organizations surveyed globally by the Association of Certified Fraud Examiners (ACFE), have reported an increase in fraud since the onset of the pandemic.[1] In a KPMG survey of senior risk executives in the United States, two-thirds of respondents predict that the risk of fraud will escalate in 2022.[2] The trend is expected to continue building into 2023, with online payment fraud losses climbing as high as $48 billion, according to Juniper Research.[3] 

The extent to which specific fraud risks affect organizations also continues to evolve during the pandemic. Cyberfraud (business email compromise, hacking, ransomware, and malware) is a heightened area of risk as per ACFE. Other significant fraud threats, in terms of both observed and expected increases, include payment fraud (e.g., credit card fraud and fraudulent mobile payments), identity crime (e.g., identity theft, synthetic identity schemes, and account takeovers), social engineering (e.g., phishing), and unemployment fraud.[1]

Building a strong fraud defense has never been more crucial. Preventing, detecting, and investigating fraud have all become increasingly difficult as fraudsters continually adapt to new trends by developing and evolving sophisticated payment fraud schemes. They function as well-organized crime groups, coordinating and communicating openly with each other while the organizations they target tend to operate in isolation. 

Connecting for Common Good to Fight Fraud 

Tackling fraud in this complex era requires an innovative trust paradigm - one that eliminates silos and leverages cutting-edge technologies to analyze and authenticate transactions and identities in real time.

Uniting the industry into one powerful fraud-fighting alliance is at the foundation of Symcor’s COR.IQ, a consortium of Canadian institutions which utilizes cross-network insights to provide a holistic view of fraud patterns and identify fraud at scale. 

Financial institutions (FIs) need to identify payment fraud with increased speed and accuracy of response while maintaining a positive customer experience. In the COR.IQ alliance, members utilize a robust framework that enables the secure exchange of data and application of machine learning, allowing them to leverage fraud insights and act quickly with confidence.

The Ideal Combination: Efficiency in Fraud Detection and Seamless User Experiences

Applying analytics to networked data, COR.IQ’s risk management solutions can recognize fraud across the network in real-time using a variety of fraud signals. COR.IQ’s holistic view helps FIs examine the risk profile of transactions and establish trust in them with speed, accuracy, and ease, which allows them to better serve their end-customers.

With a membership base consisting of Canada’s largest financial institutions, COR.IQ helps its members realize industry-wide efficiencies and gain a return on investment through loss reduction, balancing customer experience with fraud avoidance and prevention. The COR.IQ alliance has helped detect over $70 million of confirmed fraud over the past 12 months alone.

For over 25 years, Symcor has utilized its unique expertise and infrastructure to facilitate secure exchanges of data to support common industry-wide needs. With COR.IQ, member organizations have access to cutting-edge solutions that drive security and efficiency in fraud prevention. The alliance supports its members’ business growth while keeping a positive customer experience at the forefront. 

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Symcor is an active participant of Fraud Prevention Month in partnership with the Competition Bureau of Canada, the Royal Canadian Mounted Police and the Canadian Anti-Fraud Centre. To learn more, visit https://www.symcor.ca/fraud-prevention-month-2022 

Sources:

[1] The Next Normal: Preparing for a Post-Pandemic Fraud Landscape
[2] KPMG Study: US Companies are Facing Increasing Losses from Fraud, Compliance Breaches and Cyber Attacks
[3] Losses from online payment fraud to more than double by 2023, reaching $48 billion annually