New security threats in the financial ecosystem are far from a new phenomenon, which is why financial institutions are constantly having to enhance their breach detection technology investments. New threats emerge on a regular basis, and fraudsters continue to capitalize on vulnerable payment data as their techniques get faster and more sophisticated.
A new report from PYMNTS.com highlights the latest security challenges financial institutions face as the ecosystem becomes increasingly connected. This report provides an in-depth look into how banks and financial companies can combat the rise in account takeovers, along with rising concerns over cyber attacks and data breaches.
Industry Stats: Account Takeovers Rise 300 Percent
New data indicates that account takeovers jumped by 300 percent in the 2017, which brings losses to more than $5 billion. This report also exposes just how expensive this is to victims of this type of fraud. In 2017 alone, people paid roughly $290 out of pocket. More than just money, those same consumers also spent roughly 15 hours resolving the matter.
What's contributing to this rise is also the ability for cyber criminals to gain access to bank accounts easier than a credit card. Much like credit card details, bank account credentials are being sold across the dark web at a rapid pace. This has made it increasingly possible for hackers with any level of training to commit account takeover fraud. The availability of financial credentials across the dark web has also helped fraudsters commit account takeover on a larger scale.
The only way to get ahead of the problem? Proactively implementing detection techniques and technology that can pinpoint incidents at their source.
Industry Stats: Data Breaches Rise 44 Percent
Pymnts' report also provides some key data points that indicates just how troubling the data breach problem in the U.S. actually is. For example, these are a few of the stats shared that show how data breaches are spreading, how FIs are dealing with them, and what consumers think about the state of the industry.
- 80% of data breaches start with small and medium sized businesses
- The number of data breaches that were reported in 2017 hit 1,570, which was a 44% increase from the year prior.
- Cyber insurance is projected to grow into a $7.5 billion industry by 2020
- 65% of Credit Karma uses have exp[experienced a data breach
- 80+ million Credit Karma uses across the U.S. and Canada have experienced a data breach
- Cyber attacks have increased 30 percent in Europe (Q1 2018). The U.S. isn't the only one faced with rising data breaches
- 81% of U.S. consumers reported being stressed about the state of data breaches
- DDoS attacks are costing financial institutions roughly $100,000 per hour of distribution
- 82% of consumers indicated that "banks, retailers and other organizations" need to do more to protect personal credit card data
What This Data Means For Financial Institutions
As data breaches and cyber attacks continue to plague the financial ecosystem, the answer is clear: FIs need faster, better fraud detection that can help them proactively combat the spread of compromised card fraud and account takeover. While fraudsters continue to capitalize on vulnerabilities that exist across the payments, retail and financial industries, these problems are going to continue to be exacerbated at a rapid pace. These stats are not intended to shock, or scare, financial institutions into fearing the unknown that exist with the data breach market. Instead, they are designed to shed light on the reality that all organizations have found themselves in today.
Faced with these problems that are spreading at mass scale, it's up to FIs to find the right breach detection partnerships to combat the rise of data breaches, credit card fraud and cyber attacks.