A new study found a significant leap in fraud during the pandemic. In its quarterly Financial Crime Report, The RiskOps Age, antifraud technology provider Feedzai analyzed 18 billion online transactions globally and found, compared with 2019 and 2020, fraud rose 223 percent in 2021 while transactions rose only 65 percent. And account takeover fraud topped the list of most common fraud types banks and e-commerce businesses are facing.
“The shift from in-person transactions to online transactions, along with the plethora of devices and accounts each person has, creates vast amounts of data points. From a fraudster’s point of view, this is the best-case scenario. It’s easier for them to hide in all that noise,” said Jaime Ferreira, vice president of Global Data Science at Feedzai. “Every successful retailer and bank must accept that their online transaction volume will more than quadruple in the future. This will happen faster than their current methods can manage. That’s why now is the time to connect teams, connect data, and connect risk.”
One e-commerce vertical that is seeing significantly increased risk from fraud post-pandemic is digital entertainment. Feedzai attributes a 794 percent increase in fraud attacks on these platforms to the perfect “low-risk, high-reward environment” digital streaming, gaming and other digital products present to fraudsters. A massive number of low-dollar transactions is a perfect place for bad actors to hide.