Fraud prevention responses for the COVID-19 crisis

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How fraudsters adapted their strategies during the COVID-19 pandemic

Biuro Informacji Kredytowej (BIK), the most important Polish Credit Bureau and Experian analysed the fraud trends during the COVID-19 emergency in Poland compared to EMEA and identified how organized crime adapted and created a threat scenario for the current times. 

The current crisis on financial markets carries a number of threats to the global economy. It affects everyone without exception - corporations, private companies, households and individuals. It is unique at the same time, it was not caused by any financial disasters.

It is difficult to estimate the losses resulting from the rapid freezing of almost all economic activities. It is even more difficult to predict the scale of the recession, which was affected by both a dramatic drop in demand and a slowdown in supply.

Still, the impacts are like the ones experienced in previous, purely a financial, crisis also the Fraud exposures follow trends that were either known for a long time or had already started during the last year. A UK University study analysed previous recessions and accompanying fraud correlation.

Figure 1

Source: Centre for counter fraud studies, University of Portsmouth

In the chaos caused by the threat to health and the threat of losing economic stability, criminals feel like fish in water. By using information buzz, fear of infection or job loss, they create effective social engineering campaigns to gain someone's identity, access to bank accounts and authorisation codes, and ultimately extort money.

Figure 2

Source: Experian Fraud & Identity consulting EMEA

During the next months, digital means for Fraud prevention will come to the center of attention. The fact that the identification of individuals, being a good customer or a criminal, is embedded digitally into the KYC processes by means of digital identity using digital biometrics, analytic and ML solutions is here to remain. Whilst the globalisation of crime was a fact before current crisis, it sees unprecedented highs recently - also this development is here to stay. The only prevention methods that go beyond single corporations’ data and insight, will prove effective – global fraud schemes will be addressed most effectively by using global insight for the prevention 

BIK is operating an Anti-Fraud Platform based on Experian's Hunter II system. 

Since its start it has protected the Polish banking sector from frauds of the amount of PLN 252 million (updated on 30.06.2020).

 

Comparing the two pre-pandemic months (January and February 2020) to the early pandemic period - from March this year, the BIK Anti-Fraud Platform indicated a 35% increase in number of applications that was sent for verification in terms of detection of possible fraud attempts, while at the same time credit activity decreased due to the COVID – 19 crisis

The number of enquiries increased by 7% for the Anti-Fraud Bank Report (BRA) addressed to BIK Anti-Fraud Platform by banks during the pandemic period – it proofs that during the COVID-19 crisis such a sectoral solution is becoming even more needed to reduce fraud losses.

 

As the financial institutions become more cautious and use the PAF system more frequently.

Obviously, business moved to online channels – the number of cases related to the electronic devices used by the client in the process of applying for credit are clearly confirmed by the CFD BIK Platform (The Cyber Fraud Detection Platform detects and analyses financial data and transactions through electronic devices). 

The CFD Platform confirms an increase of 212% during the COVID-19 crisis of applying for credit products through online channels.

  • Keep Fraud Risk on the top of your agenda, it will be "back" soon
  • Digital is here to stay, especially in regards to Fraud
  • The definition of identity changed – it changed from personal data only and added digital identity
  • Flexibility of your Fraud prevention capabilities is key in your Fraud Management setup
  • Your client‘s identity is at risk – there is technology to keep it safe (and is a new revenue opportunity for your company)

Fraud prevention responses for the COVID-19 crisis

Cyberprzestępczość – poważny skutek uboczny kryzysu

If you would like to discover more, we can offer a free consultancy with our experts.

Experian's anti-fraud solutions

BIK's anti-fraud solutions