Most Financial Companies Prefer To Mitigate Rather Than Prevent Online Fraud

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  • 3 years ago
  • Posted: August 21, 2015 at 11:19 am

Most companies are corrupt and participate in fraudulent ventures which are later hidden from the public domain to protect their assets. A survey was done by Kaspersky Lab in cooperation with B2B International among company representatives to find their thoughts towards information security, including financial companies’ policies towards protection from online fraud. The survey found that about half of banks and payment systems prefer to handle cyber incidents when they happen, rather than invest into tools with which to prevent them.

Also read: Fraud-Vigilance launches Integrated Fraud Management Engine

During the survey, 48% of financial organisations said they take measures to protect their clients from online fraud, aiming at mitigating the consequences rather than preventing incidents entirely. Moreover, 29% of companies believe it is cheaper and more effective to address cases of fraud as they occur, rather than to attempt to prevent them.

According to the responses given by the surveyed bank representatives and payment service operators, whenever a cyber fraud incident involving a client’s account occurs, only 41% of organisations necessarily take measures to prevent such an incident from re-occurring in the future. 36% of companies conduct an analysis of the vulnerability exploited in the attack, and 38% compensate the losses. The most popular policy among companies is to try to find out who was behind the attack: two thirds (66%) of financial organisations do this.

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“Relying solely on mitigating the negative consequences of fraud is similar to trying to treat the symptoms of an illness rather than its root cause. The symptoms will recur, and the illness will progress. In this respect, Kaspersky Lab recommends that you do not forget how important prevention is. Many of the world’s leading banks have acknowledged this and have implemented ‘root cause fraud prevention’, but alarmingly many still rely on ‘reactive fraud detection’. Each year, cybercriminals invent more and more sophisticated methods of attack, and if the banks do not have preventive measures in place, it enables further growth in the numbers of financial cybercrime and increased losses,” comments Ross Hogan, Global Head of the Fraud Prevention Division at Kaspersky Lab.

So how can banks protect their clients from fraud? Kaspersky Lab’s experts recommend that banks and payment services use comprehensive online fraud protection methods to protect the bank’s clients at several levels. One such method is the Kaspersky Fraud Prevention platform which includes threat control tools installed on client devices, as well as the server component located within the bank’s information infrastructure. Through the special code imbedded into the bank’s web-page, this component can remotely detect a client device infection.

Also read: Beware of Fraudsters Online – OLX Buyers and Sellers

 

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Erick Vateta
Tech Editor at Kachwanya.com
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Erick Vateta is a lawyer by training, poet, script and creative writer by talent, a model, and tech enthusiast. He covers International tech trends, data security and cyber attacks.
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