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According to the latest report, £13.6 million will be invested in financial fraud prevention by 2024, while fraud figures indicate banks need to further increase security and educate customers about fraud prevention.
November 18, 2024. According to a recent report According to RedCompass Labs, banks will have invested £13.6 million in technology and fraud prevention by 2024. The World Payments Report 2025 also discusses the need for better fraud detection strategies, especially for e-commerce and instant payments.
Although banks are still on average 8.2 months behind criminals, Giedrė Blazgienė, CEO of Mano Bank, says banks can change this dynamic by focusing on the latest technology and educating their customers.
“As it is important for banks to continuously invest in detecting and preventing financial crimes, it is also important that those who make online payments follow some simple rules to prevent fraudsters,” says Giedrė Blazgienė, CEO of Manobanka specialized bank based in Lithuania. “While convenient, instant payments are becoming a prime target for scammers. As technologies evolve and new threats of fraudulent activity increase, everyone must remain vigilant and up to date with the latest technologies. As the holidays approach, the amount of online fraud tends to increase.”
In addition to technologies, expanding human resources is also crucial for better detection of financial fraud, according to the Mano Bank expert. Having teams of specialists dedicated to anti-money laundering can reduce crimes committed in the sector.
“Lithuania has a great advantage in this regard, such as more than 10,000 experts work in the field of anti-money laundering,” says Blazgienė. “Instant payment systems, while incredibly fast, can give fraudsters an open door to exploit weaknesses. Therefore, companies and banks can identify fraud more accurately by integrating machine learning, a new method that will revolutionize hoax detection. Machine learning algorithms can process large amounts of transaction data and identify patterns and anomalies that indicate fraudulent activity. AI/ML-based suppression layers help detect and block fraud with exact precision.”
Here are some of the most common types of instant payment fraud and ways to deal with them:
Phishing. People are tricked into revealing sensitive banking information while making an instant payment, which is then used to initiate unauthorized real-time transactions. Fraudsters can use “phishing” via text messages or emails, or “quishing”, where QR codes in messages direct users to fake websites that collect sensitive data. It is important to avoid clicking on suspicious links or providing banking information in response to unsolicited emails, text messages, or phone calls. According to Blazgienė, messages asking for excessive information often indicate a potential threat.
Account takeover. Account takeover can also take place during the direct payment process. Fraudsters can gain access to a user’s bank account information, often through hacking, allowing them to make unauthorized real-time transfers. Users must be very vigilant about their passwords, which must be strong and contain at least 14 characters, a combination of uppercase letters, lowercase letters, numbers and symbols.
A strong password can be a long, but easy to remember text with embedded characters: a favorite phrase, a fragment of a poem or any other longer phrase consisting of a sufficiently long string of characters. For example, it could be the phrase of a famous person: “.well.done,Ist.bet2ter.than.well,Said” (Benjamin Franklin’s phrase). Users should avoid reusing passwords across accounts, especially for sensitive accounts such as banking or email. In addition, it is recommended not to access financial accounts on public Wi-Fi networks, which are more susceptible to interception.
Malware. Malicious software can be used to infiltrate banking systems and intercept or alter payment instructions. Users should be taught to always install software updates and never install files received via SMS or email links. They must be careful not to disable their computers’ built-in systems that normally prevent apps from unknown sources from being installed.
Identity theft. Fraudsters can steal personal information to impersonate someone and create new accounts; they can take over existing accounts to steal money. Users should always use unique login credentials for different bank accounts and enable multifactorial or biometric authentication. They should be taught never to click on links or download attachments from unsolicited emails. They must go directly to the bank’s legitimate website by typing its address into the web browser.
Transaction manipulation. In this case, transaction data or amounts can be manipulated in real time, exploiting vulnerabilities in the payment processing system. That is why it is important to do your banking with a reliable bank that is known for its powerful anti-fraud technology and has credibility with the user. .
“Secondhand suspicion of suspicious details should be on the mind of everyone who does online banking,” says Blazgienė. “Even the most technologically advanced preventative measures can become ineffective if consumers do not take the time to question unusual online behavior.”