The Cost of Account Fraud on Financial Services Industry

I remember hearing from the CISO of a top regional bank not too long ago, and he lamented the influx of malicious login attempts his business was experiencing. ”Almost 70% of the requests to our login and authentication pages are coming from malicious bots,” he stated.

Although that number seems huge, it’s actually below the industry average. The 2020 Automated Fraud Benchmark Report put the number of malicious login attempts at between 75% and 85% of total. And credential stuffing bots have only been getting more sophisticated with time.

Even more worrying? Recent research from Aberdeen Group found that 84% of financial services companies reported that a portion of their online users had experienced a successful account takeover in the previous 12 months.

As an individual who banks online, I wasn’t very reassured by Aberdeen’s report. But as a cybersecurity evangelist on a mission to make the web a safer place, I am optimistic about the huge potential for financial services businesses to provide a safer digital experience for their account holders.

Account takeover attacks mean revenue loss

Although the techniques used to commit account fraud are industry-agnostic, cybercriminals aren’t afraid to play favorites when it comes to picking a target — and financial services companies often wind up on the hit list. That’s not a huge surprise given that banks are where the money is!

Looking at data from commercial banks, credit unions, savings institutions, and fintech businesses, Aberdeen found that companies in the financial services space can lose 1.9 to 8.3% of their annual revenue due to an ATO attack. This includes chargebacks, add-on security services and damage to brand reputation and consumer trust that cause customer churn, slower growth and lower stock value.

Take credit unions, for example. The credit unions surveyed by Aberdeen had (Read more...)