Staying one step ahead of payment fraud
When it comes to payment fraud, companies and banks are increasingly facing organised crime. flow explores the latest fraud patterns and how banks can help their clients to safeguard systems and processes
O
ver the past decade, the payments sector has been through a transformative journey, with digital
innovations and new players shaping it to become faster and more streamlined. However, it is not just corporate treasuries and their banks that have been incorporating these technological changes; fraudsters have made their own strides by continually developing new techniques to exploit corporate vulnerabilities. Today, payment fraud has turned into a lucrative business model for criminals around the world (see Figure 1). The consequences of this evolution are
reflected in projections for the cost of global cybercrime, which is expected to climb by 15% per year over the next five years, reaching US$10.5trn annually by 2025 – up from US$3trn in 2015. Cybercrime is an
enabler for fraud because it targets (and can even produce) technical weaknesses. For example, a cyber criminal might use a Trojan – a virus containing malware that is made to look like a legitimate program – to gain access to personal data or mail accounts, which in turn could be used to initiate fraudulent payments. This development is affecting corporate
clients. “The dangers of fraud were brought into sharp focus during the Covid-19 pandemic, which saw many of our employees, and those of our counterparties, move to a working-from-home environment,” said Dr Gerd Berghold, Head of Treasury Operations and Digital Treasury at rail operator Deutsche Bahn AG. “This left communication channels more exposed and more susceptible to fraud attacks.” With the frequency of payment fraud increasing in addition to the amounts being lost, companies are looking for better ways to fight it. So, what are the fraud patterns that they should be aware of?
The dangers of fraud were brought into sharp focus during the Covid-19 pandemic
Dr Gerd Berghold, Head of Treasury Operations and Digital Treasury at Deutsche Bahn AG
Changing fraud techniques While corporate clients of all sizes have ramped up IT security of electronic payments, and now that tools such as Enterprise Resource Planning (ERP) systems and Treasury Management Systems (TMS) have been made more watertight, internal processes often remain a blind spot. “It takes a lot of time and resources to attack ERPs and TMS, which is why we are seeing fraudsters looking to attack the weakest parts in instructing payments, such
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