Why Fraud Attacks on Businesses Are on the Rise

Every year, news outlets report record highs in cyberattacks. Businesses can be particularly vulnerable. To protect your own organization, you'll need to know what exactly is behind these rising attacks and where your weak spots are most likely to be. This article discusses all this and more in-depth.

Just as how each succeeding summer competes to be the hottest in history, every year seems to bring a new all-time high of cyberattacks. VentureBeat reports that successful phishing email attempts were experienced by 83% of businesses in 2021, a stark increase from 53% in 2020. Ultimately, these emails are a form of fraud meant to trick victims into giving up their personal information.

With incidences continuing to rise, so too has the demand for cybersecurity professionals with the government spending large sums to fund more programs at universities. For example, The University of South Florida's cybersecurity program is getting $20 million from the state to fund it. This increased funding follows the trend of universities meeting the demand from the business sector for such professionals by offering online courses. The online cybersecurity degree at Maryville University allows students to not only study and graduate remotely, it also fast tracks them into the workforce by reducing the course to 2.5 years. The University also uses a Virtual Lab to allow students to provide aid to businesses while they study, giving them real world experience before they graduate.

These experts are helping mitigate fraud attacks, which have increased even further amid the pandemic. As a businessperson yourself, however, you may want to know exactly why these incidents are becoming more prevalent in the first place — and what can be done about them.
 

Fraud amid the Digital Age


Today, businesses in every sector are now more reliant on digital tools and scientific advancements which open them up to cyber-attacks. Though this means that insurance companies can now tell if you've burned your house down on purpose, it also means that fraudsters now have sophisticated tools to pull off digital fraud attempts on a large scale. Some common methods they use include phishing emails, false online dating accounts, and hacking to obtain others' personal information. However, that there are now more advanced techniques too, such as generating synthetic identities to do things like taking out multiple credit cards.
 

Digitalization and COVID-19


With everything being operated at a distance, COVID-19 forced businesses to digitalize operations if they wished to remain relevant to their customers. However, doing so means presenting more weak points that fraudsters can exploit. For example, though many businesses rely on third-party cloud services for secure and convenient data storage, providers are only equipped to protect their infrastructure and not the data it contains. Consequently, it's easy for experienced fraudsters to break in and keep data for ransom.

In these cases, larger businesses are vulnerable due to their ability to pay more. However, SMEs are still at risk: hackers know that they’re less likely to have robust cybersecurity and anti-fraud measures in place. To make up for this, NU Property Casualty 360 explains that fraudsters attempt fund transfer fraud, instead. All these possibilities for fraud are responsible for the spike in cases.
 

The state of antifraud measures


As a result, it's now considered necessary to have a few antifraud buffers in place. Many begin upgrading their security protocols by conducting organization-wide risk assessments with the help of cybersecurity professionals. From here, businesses can invest in an antifraud system. In our post How Antifraud Systems Work, we previously mentioned that they use factors like geographic filters and authorization limits to measure fraud probability in banking or Internet transactions. However, it's also important to take some internal measures, as well.

Conduct comprehensive background checks on your employees. Foster a positive work environment to avoid workers committing fraud out of anger or frustration to the company. Educate staff on what fraud looks like and the measures they can take against it individually. Make all your antifraud strategies known to employees. Most importantly, hold any employee accountable for their actions regardless of their position. This will help emphasize that fraud will not be tolerated within your organization.


Though fraud attempts are advancing at breakneck speed, it's not impossible to prevent them. By knowing the drive behind increased incidences and what you can do about them, your business is already one step further from being a fraudster's next victim.


Article written by Ruth Jenners
Exclusively for AZN Research

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