A report from the International Monetary Fund (IMF) has revealed a concerning increase in financial fraud in recent decades, with over 20,000 cyberattacks resulting in losses exceeding $2 billion. This phenomenon has been driven by the growing digitization of financial services and the development of disruptive tools, increasing operational risk in banks and significantly contributing to a rise in payment fraud.
Financial institutions are facing an ever-changing environment, with new and sophisticated vulnerabilities becoming commonplace. From phishing attacks to the implementation of malicious software, as well as real-time fraud, the landscape is becoming more complex. According to the Finances and Technology Observatory of Funcas, this situation has emphasized the need for institutions to implement robust security measures. The European Banking Authority (EBA) has stated that 42.4% of banks in Europe consider fraudulent payments as one of the main determinants of operational risk, particularly focusing on bank transfers and card payments.
A joint report from the European Central Bank (ECB) and EBA highlights that the amount defrauded in payments has risen to 4.3 million euros in 2022, with 2 million euros in the first half of 2023. However, positive results have been observed thanks to enhanced customer authentication in the European Economic Area, reducing the risk of fraud in card transactions.
In the face of these threats, financial institutions are adopting advanced technologies to enhance their capabilities in fraud detection and mitigation. Artificial intelligence, machine learning, and real-time data orchestration are being implemented to identify suspicious activities before losses materialize. These innovations not only allow for greater efficiency in fraud identification but also contribute to reducing operational costs and strengthening the security of customers’ financial data.
It is essential that these technologies are consistently maintained and updated. Institutions must ensure they have quality and up-to-date data to train their artificial intelligence algorithms. Without access to accurate information, these systems risk providing biased results.
Comprehensive protection against fraud and cyberattacks has become a priority for the financial sector. European regulations such as the DORA Regulation, which strengthens cybersecurity, and the NIS2 Directive, aimed at enhancing operational resilience in critical infrastructures, are advancing in this direction. These regulations aim not only to ensure legal compliance but also to improve the competitiveness of European companies and foster trust among citizens and investors.
The World Economic Forum highlights the importance of cooperation between financial entities to strengthen internal controls and improve response to fraud incidents. Collaboration between issuing and receiving banks is essential for effectively combating cybercrime.
Finally, there is a need to find a balance between fraud prevention and the customer experience. The implementation of advanced tools and technologies is not only crucial for personalizing and making financial services more efficient, but also for avoiding significant economic losses. Technological innovation is thus presented as a key strategy in the fight against the growing phenomenon of digital fraud.
Source: MiMub in Spanish
