The continuous advancements in technology over the past decade have enabled the creation of smartphones and other electronic devices and made the internet more accessible to people. Consequently, it allowed businesses to operate their enterprise online, letting consumers conveniently acquire their products and services without leaving their homes.
Furthermore, people are provided with various digital payment systems, such as cryptocurrency, in this digital era. In crypto, funds are stored in a cryptocurrency digital wallet, and this peer-to-peer system does not rely on banks to verify transactions.
Nevertheless, the accessibility of digital platforms has provided convenience to business sectors and consumers alike. But, as more people rely on digital platforms, cybercriminals are becoming more creative, developing sophisticated tactics to defraud people and circumvent business systems.
Fraudulent individuals conduct different types of fraud to steal money, property assets, or personal information from victims. Phishing, identity theft, and credit card fraud are three of the most common categories of fraud.
Phishing is a social engineering technique that fraudsters use to acquire information from their victims. Bad actors ask their victims to confirm, validate, or update details on their accounts by pretending to be a trustworthy entity, for example, a financial institution. Login credentials, credit card numbers, or CVV is often the information criminals are after.
Identity theft occurs when malicious individuals assume their victim’s identity to access digital platforms and perform illicit activities. Moreover, credit card fraud happens when criminals use someone else’s credit or debit card to fraudulently acquire money or property.
Fraudulent individuals also utilize other techniques to gain access to user accounts, such as credential stuffing and account takeovers. Credential stuffing is a tactic where hackers use high-volume login credential combinations to attempt logins. Meanwhile, in account takeovers, criminals leverage users’ passwords from previously breached websites to gain access to another account.
Fraud can have a significant impact on businesses. They can experience an immediate loss of income, lose their customers’ trust, and their reputation can take a hit. To avoid these consequences, companies, especially those in the financial and e-commerce industries, must employ the best fraud prevention practices, including carefully monitoring transactions, limiting access to confidential information, encrypting transactions and emails, and staying up-to-date on the latest fraud trends.
Businesses can also include eKYC or electronic Know Your Customer protocol on their remote onboarding processes to ensure that the person trying to enroll in their services is the legitimate identity owner. Additionally, they need to use more robust authentication procedures, such as FIDO2 authentication. FIDO2 offers real-time fraud prevention. Its on-device credentials cannot be easily stolen or circumvented and often requires a second factor or biometric authentication to be unlocked.