Online merchants understand fraud losses are significant now, but in the next five years they can expect them to at least double, according to a new report from Juniper Research. The U.K.-based consultancy predicted that fraud losses among e-commerce, airline ticketing, money transfer and banking sites will surge from $22 billion this year to $48 billion in 2023.
Fraudsters leveraging personal information stolen in data breaches to assemble synthetic identities will drive the increase more than any other factor.
"Synthetic identity is currently the low-hanging fruit because, even though it takes time for fraudsters to establish, many of their targets are not set up to detect the behavioral giveaways that indicate this type of fraud," said research author Steffen Sorrell. "Fraud management providers have solutions on the market to combat this, but the industry as a whole is playing catch-up."
Junpier advises online merchants to focus on omnichannel fraud prevention services and said a strategy to assess and mitigate risk from a cybersecurity perspective will be critical for effective fraud prevention in the near to medium-term.