The latest ThreatMetrix Q1 2017 Cybercrime Report paints a frightening picture of new online fraud threats and 35% growth in cybercrime attacks globally. ThreatMetrix identified more than 130 million online fraud attacks during the first quarter of 2017.
The company attributed the increase in number of fraud attacks to several factors including growing cybercrime activity in emerging markets and an upswing in EU fraud activity. ThreatMetrix said it protects more than 5 billion online transactions every quarter, giving it a deep, global perspective on cybercrime.
“We saw a number of high-profile global breaches over the last year. Identities are being bought, sold, traded and augmented by criminals seeking to improve the success of their increasingly complex attacks,” says Vanita Pandey, vice president of product marketing at ThreatMetrix. “All of this points to one thing: Identities are the critical currency in cybercrime this year and it is up to businesses to look beyond static data to check that users are who they say they are.”
New cybercrime techniques increased
New cybercrime methods grew and are constantly evolving according to the company. The threats included:
- Remote Access Trojans (RATs) in the financial services industry;
- spoofing attacks on new fintech services such as peer-to-peer loans, global remittances and other emerging technologies
- rising media industry fraud due to low entry barriers.
Pandey said, “The complexity and speed of evolving attack vectors continues to take us by surprise. Fraudsters are operating within a much broader cybercrime landscape; one that shares knowledge, tools and exploits; trades information, tests and refines and constantly analyzes the market for new opportunities.”
EU cybercrime grows and expands globally
The report said Europe is emerging as a cybercrime center, noting the number of fraud attacks from the EU were 50% larger than the US. the UK originated the largest number of attacks and directed them primarily towards the US, Ireland, Austria and Australia. Germany, France and Italy were also sources of increased attacks.
Mobile transactions provided increased fraud opportunities
Fifty percent of mobile transactions occurred in financial services with some banks reporting three times higher mobile logins. Europe saw 51% of its transactions on mobile devices. Five hundred million more mobile transactions occurred in Q1 2017 compared to Q1 2015.
Digital wallet transactions grew by 80% while there was a 180% increase in associated bot attacks, typically used to mass test identity credentials.
Key fraud trends in Q1 2017
ThreatMetrix’s analysis identified the key fraud trends for the first quarter of 2017:
- 130 million fraud attacks identified and prevented in Q1 2017
- increase in cross-border transactions and need for higher business diligence
- account origination fraud grew
- impact of stolen user credentials and sophistication of cybercriminals grew visibly
- consumer trust in digital authentication is growing.
Banks are increasingly a target following last year’s high-profile Bangladesh Bank heist, Tesco Bank breach and attacks on the Standard Bank of South Africa and experts predict a major hit on a financial institution in 2017.
The report said cyber criminals are quickly adopting new technologies and increasing the scale and reach of their attacks:
Attacks have evolved from high volume, single vector attacks, such as the identity validation and bot attacks of 2015, to more complex, multi-vector, high value attacks specifically targeting retailers and financial institutions.
The report noted the largest attacking nations generally target other similar economic nations and the strongest economies of US, UK and Ireland are primarily targeting each other.
Transactions analyzed by type
ThreatMetrix transactions analyzed included e-commerce, financial services, insurance and media and covered authentication, payments and account originations use cases. This quarter, attacks on e-commerce were 7.3% of the total with more than 80 million rejected transactions, a 45% increase over the previous year.
Fraudsters increased their targeting of the travel and entertainment industries with fraudulent ticket purchases and loyalty program fraud using device spoofing and identity fraud. Sharing economy developments such as home sharing and fake listings are proving a challenge.
Rejections of financial services transactions, with more than 50% on mobile, grew 40% over the previous year. The biggest fintech fraud attacks included identity spoofing (7.1%), bot attacks to mass test credentials (4.1%), device spoofing (4.0%) and IP spoofing (1.7%). Bot attacks are increasingly targeting financial institutions with millions of fraudulent attacks and scripts mostly targeting new account applications.
Because the insurance industry has little face-to-face contact with customers, mobile transactions and new account openings showed increased fraud attempts. with bot attacks (7.9%) and device spoofing (5.9%) most common.
ThreatMetrix identified and prevented more than 23 million media, travel and entertainment attacks in this quarter. Fraudulent new accounts grew 50%. Other common attacks included bogus reviews and listings, account takeover and payments fraud.
Device spoofing (6.1%), identity spoofing (4.9%) and bot attacks (4.5%) were the most common means of attack globally in the insurance industry.
Growth of mobile transactions
Anonymous transactions and masked locations are big problems but the growth of mobile is the biggest future challenge.
Mobile transactions grew 400% in the past two years. Fifty-three percent of new account openings happen on mobile devices.
As mobile adoption continues to grow in developing and developed countries, mobile payments fraud is looming as the next biggest challenge for security experts.
Around half of all logins and new account creations now come from mobile – account creation has grown from 28% in Q1 2015 to 53% today, and account logins 16% to 46%, showing just how pivotal mobile transacting has become for key account functions. The prevalence of stolen identities and tools to enable cloaking / spoofing is causing attacks targeted at mobile devices to evolve and increase.
Cybercrime future
The path ahead for cybercrime prevention is complex and quickly, and constantly, evolving. Fintech, mobile growth, global e-commerce and new technologies create a complex mix of challenges and opportunities. What’s certain is that cybercrime fighters will be forever employed.
You can view highlights of the ThreatMetrix Q1 2017 Cybercrime Report and get a free download of the report here.
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