While digitization has eased our lives, it has brought along some new challenges along with it. It has especially proven to be a double edged sword in the financial sector. One universal issue that companies combat is Cyber Crime. No matter how many compliances or checks are put in place, some new threat can sneak in. This has led to companies making Fraud Prevention on the top of its agenda. E-commerce businesses are especially vulnerable to cyber attack since they have access to sensitive information of their customers. Hence there is a need for right kind of checks to be put in place to ensure customer safety.
Cyber Crime: A multi-layered issue
The biggest challenge with Cyber Crime is keeping a track of exposed vulnerabilities and tackling them before they cause any lasting damage. Another challenge is that once the funds are stolen, recovering them is extremely difficult. The fraudsters are becoming more sophisticated while the systems are struggling to keep up. Inability to do the damage control can have devastating effects.
Payment Schemes vs Internal threats
Most organizations have had a payment process set in place that traditionally involved issuing a cheque once the payment was processed. With changing payment modes such as net banking, online transfer via NEFT, IMPS etc, payment wallets etc, it’s become extremely critical to use tools to prevent the frauds. Sometimes it is the internal teams that take advantage of the loopholes instead of plugging them.
Understanding the types of frauds is the first step to deal with them. Some known frauds are as below:
· Phishing: When a site requires to add your personal and banking details, there is a threat of phishing. The trusted sites include banking partners but sometimes unknown sources like e-commerce sites could use their platform to access your financial information
· Identity Theft: Using personal information and using it for online activities under false pretense.
· Pagejacking: Hijacking a website and redirecting to a different website with potentially dangerous materials that could cause a security threat
· Advance Fees: Certain fees charged before extending a service or a payment in exchange for a credit card at a later date.
· Merchant Identity Theft: Impersonating a legitimate business and charging stolen credit cards.
Prevention and problem solving
As challenging as it is, there are ways to try and stay ahead of the game or at least attempt Damage Control even if complete elimination is difficult. Some steps are as below:
· Ensure that the Fraud Checking is prioritized
· Verify the payment processor
· Train and educate the compliance team
· Encrypt the confidential communication
· Update passwords at regular intervals
· Update compliance and policies
· Run regular security checks
· Keep tabs on individual consumer accounts
· Revamp the banking processes
· Regularly update the security software and tools
· Keep testing and checking the security for loopholes