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IDENTIFYING FRAUD IN A WORLD OF COVID-19 COPYCATS

By Ian Newns, Fraud Specialist at RSA Security

 

The pandemic has changed much about the way we live and work today. Unfortunately, as is often the case, those with malicious intent have been the quickest to react. They saw the huge surge in online consumer spending at the start of the year and immediately set about ways to capitalise, by hiding themselves among the increase in legitimate transactions. Banks continue to bear the brunt of these increasingly skilled campaigns: last year, over £1.2 billion was lost to fraud in the UK.

Payment card scams accounted for the largest proportion (48 per cent) of these losses. If financial institutions want to get better at detecting and repelling these attempts, the answer lies in taking a data-driven and context-aware approach, so your analysts can identify new patterns as they emerge.

 

From holidays to the yoga craze

Customer data is the key to unlocking value for the typical fraudster, and they have plenty of ways to get hold of it. According to latest RSA Quarterly Fraud Report, phishing remained the most prolific type of fraud threat in the second quarter of this year, followed by brand abuse attacks, where fraudsters imitate a legitimate brand in online content such as social media, with the aim of misleading users. Despite being one of the most prolific and well-recognised online fraud tactics of the past decade, phishing emails are getting better at mimicking legitimate links, messages, accounts, individuals and websites, and successfully tricking users into giving up account logins, financial, or personal data.

Ian Newns

The result is that there’s now a glut of financial and identity data at the disposal of fraud groups today. And they’re using it in increasingly sophisticated ways to commit payment fraud.

For example, when COVID-19 hit, the payments landscape changed almost overnight. Down went bookings with travel companies, cinemas and theatres, and up went spending with supermarkets, sports shops, and home furnishing and DIY stores; in fact, one of our home furnishing merchants recorded a 133 per cent increase in spending via online channels from Q1 to Q2 2020. While the panic buying of March thankfully seems to have abated, consumers’ changing preferences and appetite for products such as yoga mats, bread flour and house plants is likely to continue, especially as regional lockdowns take place across the UK.

Well, fraudsters noticed these patterns too, and adapted their behaviour to mimic that of legitimate cardholders. While Q2 saw a 67 per cent quarter-on-quarter drop in mentions of hotels and airlines within the social media fraud groups that our fraud analysts track, scammers instead migrated to popular high-value purchases such as treadmills and exercise bikes.

 

Blending into the background

Other tricks designed to outwit traditional fraud prevention measures include the deployment of tools to alter browser session characteristics. An emulator could make a Windows machine appear to be an iOS session, for example. Or manipulations could be made to subvert timestamping, which would otherwise reveal that a transaction is being made from a different time zone, and therefore potentially a fraudster.

Other techniques we’ve spotted in recent months include routing traffic through countries where customers of particular brands are more likely to live, and the monitoring of users via remote hacking tools to learn patterns of behaviour that can be repeated later. The emergence of the latter tactic is an interesting one, as it moves fraud away from its historic use of automation, which helps fraudsters run mass credential stuffing and other mechanised campaigns. If a scammer believes a specific high-value individual is worth the extra investment of their time, they’re now prepared to spend more time and effort mimicking their online behaviour with the hope of a big pay-off.

Many of these techniques are shared on underground cybercrime forums, and even surface websites and social media groups. A recent surge in first-party fraud, where scammers make a genuine purchase but then fraudulently claim a refund, could also be helped by this kind of information circulating online. Forums discuss the different processes that individual merchants follow and some even explain to fraudsters how they can claim a refund without needing to make a purchase. Unfortunately, if the loss is relatively small, card issuers would often rather write-off the transaction than challenge the customer requesting a refund.

 

Focus on the data

Fortunately, there are things that banking fraud teams can do to reduce losses without deterring legitimate customers. Context is key: any fraud-prevention strategy you put in place must look closely at changing consumer behaviour and spending patterns to spot the fakes more easily. It should also look at individual spending: a consumer may make a one-off, high value purchase for a new PC, for example, but they’re not likely to do so more than once in a short space of time.

This approach should be employed across all purchasing channels: mobile app, website, call centres etc. Calculate transaction volumes for each and check to see where fraud is highest. For example, as mobile purchases surged this year, so did fraud volumes—rising 26 per cent year-on-year in Q2. An omnichannel approach will give you a clearer, contextual view of fraud that will hopefully improve your detection rates.

Finally, continue to enhance supervised machine learning tools with new data as it comes in. As long as it’s accurate and timely, it really is a case of “the more, the better” in this situation. Data-driven approaches like this enable fraud teams to adjust policies, create new ones and make better-informed decisions to enhance detection, even as fraud patterns evolve.

The bottom line is that fraud, like cybercrime, is an arms race. The scammers are constantly innovating with new tools and techniques, shared with each other across dark web forums—so we must respond in kind. That means taking an adaptable, data-driven and context-aware approach that remains effective even as fraud changes.

With Open Banking rules offering consumers more choice than ever in whom they bank with, friction-free security and high rates of fraud detection will increasingly become a market differentiator.

 

Business

BOUNCING BACK IN 2021: DIGITAL TRANSFORMATION IS NO LONGER A CHOICE AS DEPENDENCE ON 5G, IOT AND DATA INCREASES IN SOCIETY AND BUSINESS

Ivan Ericsson, Head of Quality Management, Expleo Group Limited

 

The global pandemic has put enormous strain on businesses and brought into sharp focus the importance of being agile, adaptable and able to increase the pace of innovation and change at short notice – catapulting technology right to the top of the agenda for many organisations.

As the economy works to get back on its feet, technology is only going to play a bigger role in our lives. At Expleo, as experts in digital transformation and the reliable implementation of technological innovations, we’ve outlined the biggest tech-driven trends that we expect to see in 2021 and beyond.

 

1)     “Digital transformation” no longer a choice

If the COVID-19 pandemic has taught businesses anything, it’s that they need to be poised to respond to abrupt market disruption at any moment, making digital transformation mandatory overnight.

With no room for delay, hugely complex corporations – that have historically been slow to adopt technology – have had to accelerate their reliance on technology just to keep afloat in recent months. Digital change, at speed, has become the norm.

Even last year, the idea of an unscheduled video conference call might put people on edge – now most of us wouldn’t think twice about calling a colleague over Teams or Zoom even for a 2-minute conversation. At the same time, social infrastructure has moved with the needs of its users, with telecoms giants strengthening and opening up networks so we can keep communicating despite social distancing.

There are now very few excuses left for operating in a non-digital way. All businesses need to be intelligent businesses that can change direction nimbly, with speed, confidence and composure. As we see more businesses putting this into practice, it’ll likely result in an increased number embracing and normalising some of the behaviours of tech-savvy giants like Apple and Amazon, who have no doubt thrived during this period.

Their success can largely be attributed to normalising an agile approach. By ensuring all applications have testing facilities built in – a “quality shadow” if you will – it allows for continuous improvements, and the ability to change direction quickly and confidently, when needed. This is particularly valuable today as the world becomes more fast-paced and increasingly unpredictable.

 

2)     Big data/AI/predictive analytics 

We’re moving into a space where big data can be extracted from the most seemingly innocuous places. In a hyper-connected world, a move as simple as a dog walk could offer huge swathes of data to the right companies. Many businesses already realise the benefits of capturing and utilising big data, but not all have taken advantage of it. The businesses that move quickest are most likely to reap the rewards in a more impactful way than their ‘data shy’ competitors. Where data used to be a side effect of business operation, it is now the driving force.

As businesses begin to rely more heavily on data to make critical decisions, independent assurance becomes increasingly important to get those decisions right. Forward-thinking, data-driven organisations must therefore assure that the data is correct in the first place, to avoid giving businesses false confidence and risk them moving in the wrong direction – something that is rarely affordable in today’s competitive and fast-paced environment. If businesses are not 100% confident in assuring the quality and accuracy of their own data, they should look to a third party for support.

A key data trend we expect to see moving further into 2021 is the increased use of predictive analytics. At the moment, businesses will often use data analytics to give us insights into our past activities, or to tell us where we are right now. However, the real value lies in knowing where we are going and how we are going to get there. Data analytics will help to identify the optional levels that can be pulled to drive change and realise business benefit.

Secondly, as intuitive technology advances and becomes more accessible, we expect over the next 12 months to see companies of all sizes begin to adopt artificial intelligence (AI) to drive intelligent analytics. In this context, AI refers to various technologies that allow machines to learn, sifting through ‘messy’ big data in order to find and unlock valuable predictive insights into future events. This allows businesses to better adapt their strategy to likely future outcomes and get a head start in the market.

However, with this ever-increasing emphasis on data and data protection, ethical AI will have a more prominent role to play in 2021 and beyond. Protected, usable Data is a by-product of good data security and privacy measures; however, the public remain wary of how their data is being used, particularly after the fallout from Cambridge Analytica’s use of data to influence an election[1]. Businesses, therefore, must give their customers confidence that their data is secure and protected.

 

3)     Moral relevance/corporate altruism

Research shows that young people are increasingly researching and considering the ethics of brands they’re purchasing from. And it won’t be long before this attitude starts seeping into every other aspect of their lives, with more and more people wanting to work for what they consider to be “purpose-driven” businesses.

Talent is the lifeblood of any company, so for big corporations, many of whom were born to create profit, this could put them in a tricky position. They might already be influencing society in a positive way – but this is unlikely to have ever been their main goal.

Moving forward, however, all organisations will have to start thinking about the “Triple Bottom Line”. That means considering the environmental and social impact of your business, alongside your commercial imperative.

We’ll soon see a mindset switch across businesses, from ‘competing’ to ‘advancing’. Instead of wanting to be the “best,” the question will be, how can I better serve the world around me?

In line with this, businesses will have to start thinking more about how to use tech for good, as we’ve seen with the likes of Microsoft Teams connecting tens of millions of people every day, during this very dark time[2].

2021 is likely to bring even more inroads when it comes to using technology to improve society, whether it’s developing bespoke problem-solving technologies or using IT to ‘eco-proof’ existing sectors, the goal for businesses is to rise to this challenge and build a better future for people and the planet through the use of technology. But all organisations will continue to need to be able to justify technology use and prove that they’re using it ethically, and in a secure manner.

 

4)     5G new networks – just about all big trends are driven by/reliant upon faster networks – particularly relevant for a more distributed workforce 

Greater access and utilisation of 5G networks across the country will underpin and accelerate all of the key trends discussed. Everything we do on our smart devices we can expect to do at higher speed, greater capacity and with lower lag times.

As our digital footprints extend beyond simple web browsing and into our daily lives through smart technology, we are creating huge amounts of data every minute. This vast flow of data is increasingly dependent on new high bandwidth networks to facilitate it. Therefore, the merging of technology and engineering will become critical in ensuring big data is carried successfully to drive analytics and drive business.

The fact we have managed to successfully work from home during COVID is a glowing recommendation for the quality of the networks as they exist today, and they will only get better.

The telecoms industry is already working overtime to ensure that people all over the country get reliable access to the internet – and the fact that there is still inequality in this area proves just how challenging this is. But, in line with this trend toward hyper automation, which will make data extraction and analysis a part of everyday life for businesses, the consolidation of tech and engineering will be ever more important.

Forward-thinking companies will look to incorporate 5G networks into their business strategy. This could be from an internal perspective to enhance the abilities of their remote workforce. Alternatively, this could relate to their own products or offerings – developing an internet of things (IoT) strategy, improve user experience, or bring products to market faster by analysing big data and adapting quicker. Either way, with increasingly improved networks, businesses are expected to take advantage of the huge increase in accessible and usable data.

 

Concluding comments:

For businesses to truly reap the benefits of these new technologies, they must be developed and adopted in the right way.

Quality assurance, trust and security are three key requirements that the technology of the future depends on to succeed. Having these requirements at the heart of any digital transformation will ensure that systems perform reliably, having been tested and assured.

By prioritising a seamless customer experience combined with an ability to create, test, and scale digital solutions and operationalise at pace, businesses will be in the best possible position to take advantage of the potential being unlocked by these new technologies.

 

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THE FUTURE OF SAVVY TECH PURCHASES IS KNOWING WHEN TO BUY

There’s no mistaking the impact technology has had in our lives. Once a novelty, technology has now infiltrated every aspect of modern society, and technological advances continue to bring new dimensions to modern living. Yet for all the good that technology brings us – and despite the costs associated with production falling year-on-year – purchasing electronics is often a significant investment.

According to new research by Carphone Warehouse, the average price of electronics in the last year is just shy of £500 at £497.70. Consumers looking to make savvy savings on big tech purchases must both understand what the industry average is for the product category they’re interested in, and learn when prices will be lowest so they can make the purchase at the right time. The electronics retailer outlined the following tips for consumers looking to take stock of technology prices.

 

  1. Know what the average price is, so you can spot the biggest savings

The first step to being able to haggle a better price is knowing what benchmarks to look out for. While you can choose to go under or over the average price – high-end models are often priced significantly higher than average, after all – it can still be useful to know what to compare prices against. The average smartphone currently retails at £527.60, laptops at £680, TVs at £712.31 and digital cameras at £782.60.

As mentioned, there are significant differences between the price of budget and top-end items. For example, while you could get a budget phone such as the Nokia 1.3 for just £65, an Apple iPhone 11 Pro Max could set you back £1,249. Similarly, while a low-end camera like the Nikon Coolpix B500 costs around £205, the camera behemoth that is the Canon EOS 5D Mark IV clocks in at a whopping £1,700.

 

  1. Before you buy, consider any upcoming sales

Once you’ve figured out what you want and the price you’re willing to pay, it can be tempting to make your purchase immediately – for fear of missing out, if nothing else. However, using the sales to your advantage could result in some nifty savings, while keeping abreast of the consumer retail industry could also help you buy at just the right time. Below is a short rundown of some key dates to keep in mind:

January: The start of the year usually sees retailers clearing their Christmas stock, with smartphones, cameras and TVs offered at sale prices. January is also when the Consumer Electronics Show (CES) is held; an event in which new cameras are often announced. If you spot a gem in the CES crowd, wait a couple of months and you could see last-gen models fall in price.

February: As well as Valentine’s Day sales, February sees the Mobile World Congress (MWC) and the announcement of new Sony releases. This month is also a great time to buy the Google Pixel and other smartphones – again due to their release cycle – as well as nab yourself a bargain camera, TV or laptop.

March-April: Look out for a ton of new releases in the spring months, with Huawei, Samsung and Sony releasing their new smartphones, and LG, Samsung, Sony and Panasonic announcing their new TV ranges.

July, August, September: The summer months bring back-to-school sales that typically see student essentials at lower prices. You may be able to enjoy a wide range of deals on TVs, laptops, computers and more during this time. Keep in mind that July is also when Intel and AMD announce their new releases. Responsible for many of the processors that make up the backbone of much of our electronic products, Intel and AMD inspire many brands to lower their prices in anticipation of incorporating their new, advanced processors into their product lines.

November-December: Black Friday and Cyber Monday are undoubtedly the biggest sale events in the consumer electronics space, with deals, discounts and flash sales offered across the entire gamut of the tech world. It’s the optimum time to invest in premium brands, including Apple, Samsung and Google.

 

  1. Embrace the pre-order period for additional bonuses

If you’re an early adopter and only the latest innovations will do, you may not be keen on last-gen products. But keeping up to date with the latest gadgets needn’t mean your bank balance has to take a hefty hit. While costs will naturally be higher for new releases, ordering during the pre-order period could mean you’re able to take advantage of bundle deals or other freebie items provided by the retailer to entice uptake. Sign up to notifications on the products you’re interested in, so you’re forewarned and ready for the pre-order period.

 

  1. Learn some insider tips to beat retailers at the price game

As a final point, when it comes to saving on tech-related purchases, it can be handy to understand retailer behaviour. For example, if you’re looking to upgrade your TV at a cutthroat price, aim for the 55” models. As it’s the most popular size, retailers tend to drop prices on these first in their holiday sales.

If you’re buying tablets, waiting until a new model has been released is usually the best time to get the best prices; last-gen iPads are often discounted a couple of months after a new release. Similarly, if Android tablets are your preference, all you have to do is wait a few months for the newest release to start seeing price drops. And if Kindles are your go-to tablet, it’s probably no surprise that Amazon is the best place for bargains, and particularly so on Amazon Prime Day.

There’s vast potential in technology – and consumer electronics are seeing more and more innovations every year. But, as long as retailer behaviour stays fairly consistent, the information above can help you comfortably get the most for your money.

 

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