Many businesses have been damaged by fraud and security issues throughout 2021. What do they need to do to bolster their position in 2022? To gain an insight into what may occur in 2022 in relation to fraud and security, Digital Journal asked Jimmy Fong, Chief Commercial Officer at SEON, the AI driven fraud detection and prevention solution, for his predictions.
Digital Journal: What is meant by digital identity passports?
Jimmy Fong: Accelerated by global social media, digital fraud has never been so rampant. Large entities like Facebook are pivoting their focus to the metaverse and the next big thing will be using a “digital identity” to work, shop, get education, collaborate and interact socially. With every major digital advancement comes fraudsters to prevent and consumers and businesses will need to pivot to nimble digital fraud prevention to keep up with this pace. Digital identities are much easier to create so security teams will need to look at how to use these digital footprints to accurately identify fraud while consumers will be interested in protecting these digital identities from being used for fraud.
DJ: How can AI and machine learning simplify the adoption of fraud prevention?
Fong: According to a recent report, e-commerce retailers now experience an average of 206,000 web attacks per month, with 42% of businesses saying that digital fraud hampers innovation and expansion into new channels. Yet, despite this, only 34 percent of companies are investing in fraud prevention and mitigation. With e-commerce booming and no signs of slowing down, machine learning to defend against fraud will be on the rise. This will help online retailers keep up with fraudsters tactics and can spot patterns that might be missed by manual checks and analyze historical data and compare it to current transactions. This will be especially beneficial during the busier peak shopping seasons.
DJ: Will we see a rise in crypto exchange fraud?
Fong: Crypto exchange fraud counts every attack designed to extort value from a cryptocurrency exchange through illegal means. Most of the attacks happen when buying crypto, where fraudsters use stolen credit cards for payment and fake IDs to bypass the KYC checks. Like online banks and loan providers, exchanges are highly targeted by fraud criminals because they are the fastest way to access what is essentially digital cash. Third-party solutions like Coinbase Commerce and BitPay are growing in popularity for businesses who want to accept cryptocurrencies; however, even the most secure cryptocurrency exchanges can’t protect users from phishing and social engineering. As crypto is still fairly new, there is a lack of awareness on crypto exchange safety and protection methods which will drive the rise of fraud.
DJ: Are you concerned that economic instability will open up economies to more fraud?
Fong: The economy will affect the rise in fraud and the types of fraud. As a result of the pandemic, people moved and shifted to work from home which opened up new digital fraud opportunities. Additionally, with the global economic crash, people were needing jobs to earn more cash. Fraudsters are able to easily create unlimited disposable email addresses or buy real emails through darket/clearnet marketplaces targeting vulnerable people online through job and email scams.
