Examining Fraud Predictions for 2022
- Fraud increased tremendously as the pandemic entered its second year
- New fraudsters are entering the arena due to the ease of committing fraud
- 10 predictions for fraud in 2022
As the industry saying goes: "New Year, New Fraud." It couldn't be more accurate, as Frank McKenna's Frank on Fraud blog opened the new year with a dire prediction for 2022: Expect more fraud, because it's simply getting easier to do.
The myth that fraud is for sophisticated criminals only is over. It’s too easy to do. It’s far too lucrative. And most of the time there are zero consequences.
The fact is we created hundreds of thousands of new fraudsters and scammers (if not millions) over the last 18 months.
We created financial pressure where they were desperate. We pushed trillions in stimulus money piles for them to take. And then we let social media platforms train them, or recruit them into the dark world of fraud.
Before jumping into the 2022 predictions, McKenna provides a list of six observations about fraud in 2021 (all of which are expanded upon on his page):
Stimulus Fraud Mushroomed to $242 Billion As Benefits Abuse Worsened
What to Expect in 2022
McKenna checked in with cyber fraud expert Karisse Hendrick to get her take on what's new, fraud-wise, in 2022. Visit the link for details on each:
- Prediction 1 – Synthetic Identity Fraud Increases With Deeper and Better Fakes And Expansion To Synthetic Businesses
- Prediction 2 – Government Agencies Are Compelled To Deal With Identity Fraud Once and For All
- Prediction 3 – Extent of Fintech Fraud Comes To Light and Forces More Prudent Controls
- Prediction 4 – Governments Will Push Banks To Take On More Liability For Scammed Customers
- Prediction 5 – Fraudster Automation Will Rapidly Accelerate, Turning Newbies Into Experts Instantly
- Prediction 6 – Scarcity Will Push Selling Scams Higher Forcing MarketPlace Vendors To Increase Scrutiny
- Prediction 7 – Digital Transformation Trend Is Going To Burn New Entrants
- Prediction 8 – Buy Now Pay Later Become Exploited With Trojan Horse Schemes
- Prediction 9 – Digital Identity Will Start A Fundamental Transformation
- Prediction 10 – Fraud API Attacks Could Become Devastating Reality to Solution Vendors
When examining the predictions, financial institutions should watch Prediction 4 closely: Governments Will Push Banks To Take On More Liability For Scammed Customers. There are many implications should the prediction hold true, particularly when it comes to check fraud. While banks must adhere to Reg CC, new government regulations' focus on stopping check fraud would represent a shift for the industry.
The Future Belongs to the Proactive
As we noted last week, it's time to be proactive rather than reactive when dealing with inevitable fraud escalation. While McKenna's blog provides insights from industry experts, they are simply predictions and should be taken as a piece of the puzzle for your fraud strategy in 2022.
What financial institutions can be sure of is that fraud attempts will continue to rise, and losses will continue to climb. That's why it's more important than ever for banks to take a deeper look at their internal processes and technologies, and adopt new innovative tech like AI and machine learning to increase their capabilities.
Fintechs across the globe have developed their technologies to address specific pain points for financial institutions across all payment channels. For check fraud, OrboGraph continues to be a leader in the industry, developing its image forensic AI to perform tests on check stock, signature, and alteration detection to increase banks' capabilities in detecting fraudulent checks.
It remains to be seen what will unfold in 2022 in the fraud landscape, but what is clear that those financial institutions that are proactive in addressing their fraud capabilities will be the ones that suffer the least.