Post-Pandemic Fraud Rate: Why It's Increasing and What You Can Do About It

Post-Pandemic Fraud Rate: Why It's Increasing and What You Can Do About It
Icon time
August 1, 2022

As the world continues to deal with the aftermath of the COVID-19 pandemic, businesses are facing an increased risk of fraud. According to a recent study, 46% of companies surveyed have experienced fraud in the past two years.

This has led to 7 out of 10 organizations facing digital fraud as their number one concern.

This rate of concern does not come out of nowhere, as it coincides with an increase in fraud around the world. From the most well-known such as phishing to the oldest such as unemployment and benefit scams.

But why is there a rise in fraud in the wake of the pandemic?

This is something that we are going to answer below. In addition, we will also discuss what companies can do about it in order to protect their users from fraud.

Why has the fraud rate increased after the pandemic?

There is no single cause for the increase in post-pandemic fraud, there are actually three main reasons for it.

1. The post-pandemic recession

The global economy is going through challenging times such as high inflation rates and supply problems. Not to mention Russia's invasion of Ukraine. All this has led people and even companies to take desperate measures.

They embark in search of better opportunities and end up being easy prey for fraudsters.

Hence, 70% of the companies surveyed by PwC said that they have increased their investment in IT security. Both for the prevention of ransomware and for the security of their mobile channels.

2. Increase in digital services and online payments.

The attacks have increased largely because companies and users are making greater use of digital platforms. From the use of e-commerce, which grew 5 times in the first three months of 2021, according to Forbes figures.

And even to the social networks where companies and customers come together to make transactions and to interact . Although these may seem like safe platforms, in reality they are a door that fraudsters have been able to take advantage of.

PwC makes it clear; "of those organizations that experienced fraud in the last two years, four in ten were connected to the digital platforms they rely on."

This is because many companies were forced to take a step into digital transformation without being prepared. As a result, the increase in fraud has accelerated after the pandemic. Which brings us to the last point.

3. Companies are still adapting to the new reality.

The growth of e-commerce and online presence is still new to many companies. So is home office and other measures that have been taken during and after the pandemic.

This has made companies, workers and customers more exposed to electronic fraud.

Due to their lack of preparation, they do not have the right tools and systems in place to protect themselves. In fact, many organizations are unaware of the common scam patterns on the web.

This results in vulnerable systems, leading to data theft, financial scams, etc.

So what can organizations do to protect their users' and their own data from electronic fraud? That's what we talk about next.

Measures you can take to protect yourself from cyber fraud

Before we get into security recommendations, we should make it clear that both individuals and companies can suffer from this type of fraud. In fact, the concern in numbers is similar.

For example, 6 out of 10 consumers have experienced some type of online fraud. While 40% of them admit to being concerned about the increase in scams. Even more so, when fraudsters continue to develop new tactics for their attacks.

This is demonstrated by a EUROPOL report, where they detail that criminals are able to circumvent security measures. Even those using two-factor authentication .

Faced with these discouraging numbers, Preventor recommends the following measures. These measures are intended to protect the data of companies and also of their users.

The security measures that should be taken by companies

In organizations there is a confluence of internal and external factors, hence the following measures should be taken:

Invest in security. The first thing a company should do is to have software that prevents all types of fraud, from ransomware to user identity theft. Something that will be very well received by your customers by being in a more secure and reliable environment.

Know your weak points. Organizations must know the entire cycle of interaction with customers and suppliers, as well as the internal process. In this way, they will know which products and communications may be more vulnerable to an attack and thus be able to strengthen security.

Centralize data. This measure allows for greater control over the life cycle of all users, including malicious users. In addition, alerts can be configured and possible fraud to the company or customers can be detected in time.

Promote the use of multifactor authentication. By 2020, according to Statista data, 36% of Americans used mobile banking. That is, they access the bank from their cell phone. That is why cybersecurity experts recommend using two-step verification (password or fingerprint plus verification code). This makes it less likely for fraudsters to obtain users' sensitive data.

Progress in multifactor authentication

Regarding this last point, Preventor offers a biometric authentication solution.  It provides continuous, high-performance multi factor verification.

One of them is facial biometrics, which is able to identify partially hidden faces. This is based on a fine analysis around the eyes, as well as an iris reading when the iris is visible.

In addition, it also features voice biometrics, device management, flexible workflows and life detection.

This technology is very useful for financial companies looking to improve their customers' experience, as well as their security when performing transactions on their platform. This will result in greater comfort for existing users and attract new customers.

Other articles

View all articles