Fraud Trends and Technology 2022

Looking Back to Move Forward

January 30, 2023 by Colin Parsons

 Fraud Trends and Technology. Lessons Learned and What’s Next for 2022

Looking to the past can help us determine the course for the future. This is an important lesson for financial institutions looking to protect themselves and their customers from fraud. Financial institutions are facing a magnitude of fraud schemes, each more complex than the next. To combat this, one lesson is essential – without the full picture of fraud, your institution may be at risk of sophisticated and evolving fraud scams.

Trends Overview 2022

2022 was the year of Authorized Push Payment (APP) Fraud, bringing to light an important truth – transaction monitoring approaches and analytics that consider only your own institution’s data are no longer sufficient to protect your customers.

In 2022, fraudsters focused on a range of APP schemes such as Business Email Compromise and consumer-based scams across various channels including Zelle, ACH, and wire. APP that used crypto-related approaches also rose in popularity, often exploiting investment-based scams destined for crypto exchanges.

What’s Next for 2023

Continued focus on payment fraud, looming shift in liability, the rise of cryptocurrency

Payment fraud is expected to be a continued focus, with FedNow℠ launching and the continued growth of the TCH-RTP network. As adoption grows on these faster payment offerings, fraudsters will begin to migrate to real-time payment channels.

The looming shift in liability in the U.S. is also an important trend to watch. Under Regulation E,​ financial institutions are generally not accountable​ when consumers are defrauded​ through APP scams. Recently, U.S. Senators began urging ​for better protection for P2P related fraud, ​potentially shifting financial liability ​from victims of P2P fraud ​to financial institutions.

The rise of cryptocurrency is another important consideration for 2023. As cryptocurrency becomes increasingly integrated into the financial services sector, financial institutions need better visibility of both fiat and blockchain transactions to help combat crypto-related fraud.

Leverage the Power of Consortium Analytics

As fraud evolves in 2023, financial institutions must follow suit with their fraud monitoring approach. Risk is migrating to the receiving side of transactions — financial institutions need visibility into the full picture of fraud, including insights into the payee, to effectively combat fraudulent transfers. Verafin leverages the profiles of 300 million counterparties based on our consortium of 2300 financial institutions to detect and mitigate fraud across numerous payments channels.

Equally important is the insight into your customers. By utilizing cross-channel fraud detection and fraud management capabilities, your institution can see across multiple channels in a single solution. With a complete entity resolution, you can identify and understand your customers’ activities across all payments channels, and quickly determine safe and risky payment relationships.

To learn more about how Verafin can effectively protect your financial institution and customers against fraud scams with a consortium-based solution and more, watch our year-in-review webinar, 2022 Fraud Trends & Technology, where we explored the top fraud trends identified in the Verafin Cloud, the ongoing challenges of payments fraud and scams, and how financial institutions can be best prepared to deal with upcoming regulatory changes.

Nasdaq Verafin provides cloud-based Financial Crime Management Technology solutions for Fraud Detection, AML/CFT Compliance, High-Risk Customer Management, Sanctions Screening and Management, and Information Sharing. More than 2,500 financial institutions globally, representing more than $8T in collective assets, use Nasdaq Verafin to prevent fraud and strengthen AML/CFT efforts. Leveraging our unique consortium data approach in targeted analytics with artificial intelligence and machine learning, Nasdaq Verafin significantly reduces false positive alerts and delivers context-rich insights to fight financial crime more efficiently and effectively. To learn how Nasdaq Verafin can help your institution fight fraud and money laundering, call 1-877-368-9986.