Living in an era of speed, we’ve come to rely on technology in every aspect of our lives, from entertainment and education to work and online payments. But behind the screens that give us easy access to services, there’s a whole world of threats that can change our lives in seconds.
Digital fraud is among the worst.
According to a 2024 Report on Payment Fraud[1], fraudulent credit transfers exceeded €1.13 billion in just over six months in 2023, in Europe alone. And these numbers are only expected to grow in the coming years.
That’s why it’s vital for targeted institutions, like banks, to take preventive measures and educate their staff on how to handle this kind of risk.
What is Digital Fraud?
Digital fraud, or cyber fraud, is a criminal activity where people are deceived into making payments online, transferring funds, or handing over money to a scammer who may promise fake investments.
But fraudsters don’t just target common people. They aim for larger enterprises, like global banks and financial institutions that work with copious amounts of sensitive and financial data. The bigger the prize, the more heinous they become.
What Types of Digital Fraud Target Banks?
Cyberfraud is different from cybercrime, because it preys on human reaction and trust, not just flaws in technology. Therefore, knowledge and prevention are our best tools against it.
The most common types of digital fraud to look out for are:
- Phishing and Vishing Scams – Where cybercriminals use pose as trusted individuals (friends, family, or entities) to deceive a victim into transferring funds either through email, phone calls, or deepfake videos.
- Account Takeover / False Identity Fraud – In this case, a fraudster hijacks a customer’s online banking account using stolen credentials or malware, or they try to open accounts under fake identities.
- Insider Fraud – Sometimes, a bank employee can take advantage of the access they’ve been given to alter records, share sensitive information, or help others slip past security controls for their own benefit.
- Payment Fraud – Lastly, cybercriminals can exploit poor security measures to quickly perform unauthorized transfers, invoice fraud, or send funds to fake accounts.
These are just a few of the most known types of digital fraud, but with how sophisticated cybercriminals have become lately, we can expect more tactics to arise in the following year.
So, what can banks do to prevent them?
How Can Banks Prevent Digital Fraud?
Technology can be our sword and shield if we know how to use it. For banks that rely on digital platforms to run operations and store sensitive data, it’s the first brick in the foundation of a powerful security strategy.
Here’s a few efficient methods for banks to prevent digital fraud:
- Implement EDR (endpoint detection and response). These automated tools actively monitor your systems and every device that connects to them, looking for threats, and containing them once they’re spotted.
- Educate your staff. Cybersecurity is not built on technology alone, but people. Social engineering testing can help your employees not only recognize digital fraud but also teach them how to react when a potential attack occurs.
- Run periodic pen tests. Pen testing is not only surface level checking, but it can dig deeper into your systems to look for vulnerabilities that people can often miss. Hackers now where to look, but so can you.
- Network Segmentation. In case of malware or even unauthorized access, the more segmented your system is, the lower the chance for an attack to spread. This makes it more difficult for criminals to get their hands on customer or financial data.
- Look for danger both outside and within. Fraudsters aren’t always faceless criminals that attack from afar. Sometimes, it’s bank employees who try to compromise valuable data or finance.
Moving Forward with Confidence
Cybercriminals will not stop, but their digital fraud attempts can be prevented. With the right tools and knowledge, banks can enhance their security even in the face of overwhelming threats.
But it’s important to remember that what makes cybersecurity good is not just technology alone. It’s how we, the people behind it, use it.
We’re stronger when we work together and educating each other is just the first step in building that confidence.
Cited Sources
1 – European Banking Authority, “2024 Report on Payment Fraud”, (EBA_ECB 2024 Report on Payment Fraud.pdf)
