The report, Trust and Collaboration as Foundations to Fight Fraud, shows that the global digital attack rate increased 20% year over year (YOY) compared to 2021, continuing the trend of digital fraud rising as economies re-open following the pandemic.

The LexisNexis® Identity Abuse Index, which records the percentage of attacks per day, shows attack rates fell in the fourth quarter of 2022 although the picture varies by region, with sizeable spikes in APAC, LATAM and North America at the end of the year. 

Despite the effects of economic uncertainty, inflation and the war in Ukraine, digital transactions in 2022 went up by 24% YOY primarily driven by increasing transactions in financial services (29%) and ecommerce (17%). 

Organisations are looking to establish consistent digital identity insights across all digital channels and end-customer touch points to mitigate rising fraud levels. They are striving to increase the level of trust with their customers, as well as identifying risk more easily. The report showed that the percentage of transactions classified as trusted in the Digital Identity Network® platform increased by 9% YOY, allowing organisations to provide a smoother customer journey.

“Businesses remain vulnerable to transactional fraud during this time of accelerated digitalisation,” said Stephen Topliss, vice president of fraud and identity strategy for LexisNexis Risk Solutions. “Despite heightened regulatory scrutiny, technological innovations and higher public awareness, there are persistent challenges in preventing fraud. This trend is likely to endure as consumers continue adopting digital channels. As fraud levels and its sophistication increase, relying on multi-factor authentication alone as a defence is inadequate in today’s digital world. Organisations, industries and countries must collaborate and identify the interconnected signals of complex fraud attacks because criminal networks working in a structured way are here to stay. Addressing the latest scams requires targeted machine learning models that can consume the latest digital intelligence insights, behavioural biometrics signals and mule account indicators.”

Key findings from The LexisNexis Risk Solutions Cybercrime Report, January to December 2022:

• Mobile Channels Increasingly Popular – Mobile transactions have reached a record high of 77% of all observed transactions in the Digital Identity Network, with the mobile app channel making up 82% of all mobile interactions.
• Attack Rate Continues to Rise – The global attack rate continues to increase, driven by an uptick in the financial services and ecommerce industries at 31% and 29% respectively. The report shows that criminals continue to target the communications, mobile and media industries more than any other sector. However, a noticeable decline of 27% YOY in the overall attack rate suggests criminals are changing focus. 
• Vulnerabilities in Payments – Across all desktop and mobile channels, attack rates on digital payments increased 27% YOY. Alternative payment methods, such as digital wallets, QR code payments and peer-to-peer transfers, continue to gain popularity, particularly in APAC. The shift has contributed to the 32% YOY growth in payment transactions in that region, yet criminals are also fast at exploiting vulnerabilities. The report shows a 50% YOY increase in APAC’s payment attack rate.
• Lucrative Avenue for Cybercrime – Automated bot attacks in the ecommerce space have grown 195% globally. Almost half of these attacks focused on the U.S., where ecommerce focused bot attacks increased by 127% YOY. Bot attacks increased 112% in the U.S. gaming and gambling industry, while the sector grows due to legalisation in more states.

Read the report.

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Fraud is a global threat: LexisNexis® Risk Solutions

LexisNexis® Risk Solutions has shared the latest findings of scams in an increasingly borderless digital landscape in Asia Pacific, including the trends and types of fraud in the region and the outlook for 2023.

The findings leverage the data from the LexisNexis® Digital Identity Network®, which processed 6.5 billion transactions from July 2021 to June 2022 in the Asia Pacific region. It recorded 3.3 billion bot attacks and fraud attacks during this period globally.

Stephen Topliss, vice president, fraud and identity, LexisNexis Risk Solutions shared his insights on the rise of frauds faced by Asia Pacific organizations and how the digital shift is fuelling the fraud surge. Topliss said, “We can see a consistent growth in our data in Asia Pacific over the past year, which highlighted how third-party fraud has evolved to be more sophisticated than ever.”

Data from LexisNexis Risk Solutions shows the percentage of attacks per day across the entire Digital Identity Network® platform, which tracks and provides an indication of how attack patterns have changed over time.

Key Findings and Highlights:

• Fraud is a Global Threat: LexisNexis Digital Identity Network shows that scam centers in Cambodia are an emerging source of a significant number of cyberattacks targeting Hong Kong and Singapore. Cyberattacks in other countries in Asia Pacific, such as Japan and Australia, show more of an international distribution.
• Scammers Targeting Mobile Channels: Digital fraud attacks continue to rise globally, especially on mobile channels. Attack volumes on mobile surged 94% year-on-year worldwide, from 260 million to 505 million, compared to the same period last year.
• Evolution of Scams Across Borders: Traditional third-party fraud is most commonly found in many parts of Asia and has slowly evolved into impersonation scams with third-party account access. This type of more sophisticated scam is harder to detect and more prevalent in Hong Kong and Singapore. Australia, the U.K. and the U.S. are showing a newer trend of impersonation scams related to authorized push payment fraud.

“Organisations that rely on conventional methods to detect scams will find it challenging to keep up with the complex and fluid global landscape,” said Thanh Tai Vo, director of fraud and identity, LexisNexis Risk Solutions. “Transitioning from physical identity to digital identity requires a multi-layered defense, with digital intelligence and behavioral analysis as key elements, has become the trend to make smart, informed decisions for fraud prevention. Adaptive authentication will also be vital in helping businesses to thrive and stay competitive with lower friction and higher security in today’s mobile age.”

Download a copy of the True Cost of Fraud Study – APAC Edition or the LexisNexis Risk Solutions Global State of Fraud and Identity Report to explore more research and insights from industry experts on recent fraud and scam-related statistics and trends.

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Pandemic-driven digital transaction growth continued to attract fraud attacks.

LexisNexis® Risk Solutions released the results of its first Global State of Fraud and Identity Report, exploring research and insights from industry experts on recent statistics and trends from our industry-recognised studies on the Global True Cost of Fraud and transaction data from over 39B transactions from the LexisNexis® Digital Identity Network® from January 2022 to June 2022.

The report demonstrates how digital transactions dominated the global marketplace as the pandemic-driven trend of consumers migrating to online interactions became commonplace behavior. Digital transactions in the LexisNexis Digital Identity Network rose by 37% YoY for the period.

Pandemic-driven digital transaction growth continued to attract fraud attacks, with global businesses recording a 32% jump in the human-initiated attack rate over the past 12 months, while high-velocity automated bot attacks were up 38% YoY.

Shifts to mobile channels continued to increase, reaching 76% of all transactions in the Digital Identity Network. Consumers today use an average of four connected devices to facilitate digital economy transactions. The addition of new ecommerce channels via marketplaces and within the wider banking ecosystem, along with a proliferation of payment options such as Buy Now Pay Later (BNPL), digital wallets and QR codes, contributed to a growth in transactions across mobile channels.

As consumers adopt multiple digital channels and payment formats, they expect a positive experience and trusted security measurements at every touchpoint. Identification and authentication solutions across the entire customer journey are becoming mandatory, as fraudsters build attack strategies at every stage. 1 in 12 new account openings and 1 in 20 password resets represent an attack.

Greater connectivity is leading bad actors to continually devise new methods and expand the complexity and scale of their attacks. Cybercriminals quickly launch complex attacks on the weakest link in the omnichannel network, targeting individuals who are newer to transacting online with less cybersecurity awareness while targeting companies that in their rush to provide consumers with digital transaction options, have not deployed adequate defences.

Large-scale cybersecurity breaches and the recent digital evolution have created an ideal incubator for scams to cultivate and thrive with identity theft. Studies show that optimizing identity verification approaches leads to safer omnichannel ecosystems.

Key Findings from the LexisNexis Risk Solutions Global State of Fraud and Identity Report:

• Bot Attacks Continue Rising: Businesses globally experienced a 38% increase in malicious bot attacks in the past 12 months. Ecommerce businesses in particular face a bigger threat as the bot attack rate increased 155% YoY. Regionally, EMEA recorded the highest growth in bot volume (98%), followed by LATAM (83%).
• Human-Initiated Attacks Also Continue to Grow: Human-initiated attack rate grew 32% YoY globally. North America showed the highest YoY increase of 52%, followed by EMEA (19).
• Fraud Evolves with New Payment Methods: Increased adoption and strong demand for contactless payment methods in APAC are major contributors to the rise of QR code fraud. QR code payments and peer-to-peer transfers are becoming the leading payment channels in Southeast Asia and India. BNPL is gaining traction globally and in EMEA particularly, leading to an increase in New Account Opening fraud.
• Risks Across the Customer Journey: Fraud networks are increasingly industrialized and pervasive in the omnichannel digital ecosystem leading to a dramatic rise in scams including social engineering, identity theft, password reset and account takeover fraud. The escalating risk of account takeover fraud is one of the biggest threats, as mobile app logins attack rates increased 211% YoY.
• Identity Verification Remains the Top Hurdle: Customer identity verification remains a top challenge for global businesses across APAC, EMEA, LATAM and NAM. Global businesses cited limited real-time third-party data (46%) and limited real-time transaction tracking (43%) as the two biggest challenges in verifying customer identity in online channels.
• Industrialized Fraud Networks Attack Businesses Across Border: Fraudsters work within complex networks. Every piece of data used is linked to the next valuable piece of data on a mass global scale. Therefore, businesses and industries need greater collaboration globally to fight the fraud network but also to understand who the trusted consumers are. Gaining visibility of trusted consumers allows businesses to open up new revenue channels and upsell to a loyal consumer base.

“Digital fraud has continued to grow as economies around the world re-opened in 2022, as we anticipated in our H2 2021 Cybercrime Report based on early trends in the U.S. and EMEA. The latest surge in scams shows how the fraud landscape will continue to morph. Organizations need to use flexible fraud prevention models coupled with an adaptive authentication approach,” said Stephen Topliss, vice president, fraud and identity, LexisNexis Risk Solutions.

“Using digital identity intelligence can improve the omnichannel consumer experience by providing a unified and persistent view of associated risks, helping to drive conversion rates, customer satisfaction and loyalty. A solution approach deep in layers, combining behavioral biometrics with global digital identity data and risk-appropriate authenticators, enables businesses to confidently make risk-based decisions while delivering a friction-appropriate customer journey.”

Methodology

The LexisNexis Risk Solutions Global True Cost of Fraud is an extensive survey of 2,952 risk and fraud executives in retail, ecommerce, and financial services/lending across APAC, EMEA, LATAM, and North American regions.

Analysis based on transactions and attacks detected by the LexisNexis Digital Identity Network (the Digital Identity Network) from January – June 2022, during near real-time analysis of consumer interactions across the online journey, from new account creations to logins, payments and other non-core transactions such as password resets and transfers. Transactions are analyzed for legitimacy based on hundreds of attributes, including device identification, geolocation, previous history and behavioral analytics. LexisNexis Risk Solutions customers benefit from a global view of risks, leveraging global rules within bespoke policies that are custom tuned specifically for their businesses.

Read the report.

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In a truly global digital economy, borders are no longer boundaries for trade or cybercriminals.

LexisNexis^® Risk Solutions has released the results of its latest Cybercrime Report, an analysis of transaction data from the LexisNexis^® Digital Identity Network^® in the second half of 2021. The report shows a significant shift to mobile fraud over the last four years, with mobile traffic representing 75% of all traffic.

The Cybercrime Report analysed 35.5 billion transactions over the six-month period, up 44% year over year (YoY). This stemmed from increased transaction volumes from existing customers and an increased customer base within the Digital Identity Network^®. Though global pandemic-related restrictions eased in the second half of 2021, the report found online transaction volumes continued to grow, specifically across financial services (52% YoY) and communications, mobile and media (45% YoY).

Increasing consumer confidence leads to enhanced demand for a customer-centric digital world. Companies are prioritising their digital customer experience strategies to retain and acquire new customers, which is advantageous for legitimate consumers but may lead to opportunities for fraudsters.

Key findings from The LexisNexis^® Risk Solutions Cybercrime Report, July to December 2021:

• Welcome to the Mobile age – Global accelerated digitalisation and adoption of mobile applications fueled by the pandemic continued across a multitude of different demographics and geographies. The first Cybercrime Report published in 2014 indicated that the percentage of mobile traffic in the Digital Identity Network was a mere 25%. In the second half of 2021, the mobile transaction split reached 75% for the first time. This shift was driven by a few factors: a predominance of mobile usage amongst younger generations; mobile app-only fintechs and the emerging market population moving straight to mobile and skipping desktop altogether; and the rapid decrease of service data and smart handset costs.
• Scams on the Rise in North America – Cryptocurrency excitement together with pent-up consumer savings, relief checks and increased online shopping due to Omicron, fueled U.S. transaction growth while triggering a rise in scams. The Digital Identity Network tracked 15.3 billion transactions in the U.S. and Canada in the second half of 2021, up 22% YoY. There was also a significant rise in human-initiated attacks, with a growth of 50% YoY based on 157 million attacks.
• Automated Bot Attacks Continue to Rise; Human Initiated Attacks Rose for the First Time Since 2019 – Automated bot attacks grew 32% YoY globally, with LATAM showing the highest growth at 455%. The U.S. and Canada has seen a 7% YoY decrease with 692 million attacks. Human-initiated attacks rose for the first time since 2019.
• The Life of a Prolific Fraudster – Just one fraudster can leave a large footprint. The Digital Identity Network observed one fraudulent digital identity that attacked 35 different organisations and had 580 events associated with it. These included: 100 attempted account/creations/credit card applicants/loan applications; 45 attempted ecommerce purchases; 12 attempted password resets; and seven attempted changes to account details. The ability for organizations to benefit from global shared intelligence enables them to identify and stop more attempted fraud in real-time as fraudsters continue to benefit from breached identity data and automated bot credentials testing.

“It is time to unite in the fight against cybercrime. In a truly global digital economy, borders are no longer boundaries for trade or cybercriminals. It is more apparent than ever that fraud goes beyond single industries or countries,” said Stephen Topliss, vice president of fraud and identity strategy for LexisNexis Risk Solutions. “For businesses to succeed in the digital world, they need to collaborate in the fight against fraud. This can be achieved by utilising the power of a global anonymised digital identity network and through the establishment of more focused digital consortiums among industry peers.”

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