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Predictions for financial fraud in 2022



By: Andy Renshaw, SVP product management at Feedzai


Fraudsters are continuing to get more familiar with their targets and dedicating more time to understand their lifestyles, which means highly targeted and personalised scams are becoming the norm. In addition, many banking customers embraced digital banking habits because of the COVID-19 pandemic making them unlikely to switch back to their pre-pandemic practices. This has resulted in a rise in digital interactions, hence leaving increased targets for fraudsters to pursue using social engineering. Armed with personal credentials obtained through the dark web, phishing or even social media, fraudsters can launch account takeover (ATO) attacks and compromise a legitimate user’s account. And if fraudsters can’t breach a customer’s account, they might use social engineering to trick victims into deliberately transferring them money using authorised push payment (APP) tactics. This latter type of fraud has become especially problematic in the UK.


Here’s some other personalised tactics that consumers will have to contend with in 2022:

Fraudsters practice patience: With more effective online security measures in place, fraudsters are thinking bigger to maximise their monetisation opportunities. Instead of quick “smash and grab” attempts that involve breaching an account and quickly transferring money, they will patiently observe a victim’s financial patterns. This includes details like when their paycheck is deposited and where they shop online. With this understanding, they will know when victims receive their pay and when they have the highest amount of money. By conducting layered research using social engineering or personal information obtained from phishing or malware attacks, fraudsters can carefully hone their message to make scams more convincing.

Rise of the narrative: Banks have been working for years to offer more personalised services to customers. Unfortunately, fraudsters are adopting the same strategy by crafting highly tailored narratives to deceive their victims. When a fraudster accesses a victim’s bank account (or email or eCommerce account, for that matter) they can learn important details about their life. For example, if they see their victim recently made payments for a parking violation or paid for a medical procedure, fraudsters can adopt the persona of a municipal employee or a medical office worker and claim a recent payment was not processed correctly. Next, they tell their victim to share their credit card or send money to a bank account they control. Because the fraudster uses such specific details, their scams have a better chance of working. Some fraudsters will craft a portfolio of narratives for a wide range of scenarios.

Taking advantage of FOMO: Want to get rich quick? Fraudsters hope so and they play on well-established human behaviours like the Fear of Missing Out (FOMO). They will use FOMO to lure victims into get-rich-quick schemes. Some scammers will use the same social engineering tactics mentioned earlier to design a scheme specific to their victims’ lifestyle or demographic. Once they familiarize themselves with their targets, the fraudsters will use high-pressure tactics to convince victims that a once-in-a-lifetime, low-risk high-reward opportunity is available to them. Cryptocurrency scams are becoming increasingly popular with fraudsters for these types of schemes, which can cost individuals vast sums of money. Australian Federal Police recently reported a 172% rise in cryptocurrency scams from January to November 2021. Unfortunately, the mystery and newness of crypto makes these scams highly appealing to fraudsters.

Romance Scams: Romance scams proved to be one of the biggest scams of the pandemic, with consumers losing an estimated £68 million in 2020. Scammers approach their victims online using dating sites or apps and pretend to be romantically attracted to them. After they convince their target that their relationship is genuine, they ask them for money for medical expenses, vehicle repairs, or for plane tickets to meet in person. In the end, the fraudsters pocket the money and disappear. This trend is on track to continue as more people turn to dating apps for companionship in 2022.

And it’s not just the personalisation of attacks that will increase, fraudsters will take advantage of new and emerging payment methods that are designed for convenience as well:

B2B Payments: After a long build-up, it’s looking like instant business-to-business payments are on track to finally become a reality in 2022. When instant B2B payments debut, both banks and businesses must apply the lessons learned from consumers real-time payments. Consumers after all, expect to access banking services on a 24/7 basis. Businesses need to prepare for how this enhanced speed of payments leaves them vulnerable to fraud. If a business loses money in real-time to fraud, the organisation will struggle to trust banks that facilitate the transfer. Instant B2B payments opens new opportunities for fraudsters to defraud businesses quickly. That’s why it’s important that banks and businesses both implement the right safeguards.

Connected Commerce Confusion: Gone are the days when consumers have a checking, savings, and credit card account. Now, most consumers have multiple traditional accounts, and a host of digital accounts like Paypal, Venmo, or even WhatsApp. And it doesn’t stop there. Many connected smart internet of things (IoT) devices like Amazon’s Alexa or Google Home can send money using voice commands. And soon it will be commonplace for people to send money through social media platforms. If all this sounds like a dream come true for fraudsters, it is. In a connected commerce ecosystem, we expect to see a spike in attacks on IoT-connected devices and social engineering attacks. A disparate arrangement of finances calls for a new approach for banks to manage their customers’ financial risks.

Challenger Banks: Digital-only and digital-first challenger banks need to attract more customers.  One way they’re doing that is by making it easier for customers to quickly onboard. They also specifically want to appeal to younger customers, so they’re marketing their services on social media or partnering with digital influencers like YouTube and TikTok celebrities. Unfortunately, fraudsters are also looking to onboard with challenger banks. They realise many challenger banks have no physical infrastructure to meet customers face-to-face, and want to make onboarding as seamless as possible. Given the combination of these factors, fraudsters see challenger banks as top targets.

Targeting of Millennials & Gen Z: As younger people join the digital banking system, fraudsters will be eager to take advantage of their unfamiliarity with digital banking. While younger people are more tech-savvy in a social context than their older counterparts, fraudsters have found several tactics that have proven effective against millennials and Gen Z customers to take advantage of them from a financial perspective. The latter group is falling for fake check scams at the same rate as senior citizens. Meanwhile, one in five millennial shoppers experienced online fraud during the 2020 holiday shopping season. Fraudsters will also scour these users’ social media accounts for social engineering purposes.


How to Build Your Credit Up Safely




by Taylor McKnight, Author for Compare Credit


What Is Credit?
Credit is money owed by a person that allows them to pay off debts at a lower interest rate. Most banks use your credit score to determine how much they should lend you. Any business loan or mortgage requires that you have a good credit history. However, if someone has poor credit(, they may struggle to pay back these loans, resulting in higher interest payments, making it more difficult than ever to repay the debt. Lenders are aware of this issue and keep a close eye on your credit rating to ensure that no negative information gets reported. This could prevent you from getting another loan in the future. It is important to note that having a bad credit score does not mean you have had a bankruptcy or other kinds of defaults. Many people often face this problem because of unpaid bills or late payment fees. However, this does not mean that you cannot repair your credit – it simply means that all parties involved must work together to solve the problem.

How to build your credit safely
Building your credit score is a major concern for most people, especially if they plan to purchase something as big as a home or car. A good credit score will help one get better rates in the future and make it easier to finance their next venture. Here are some things you should know to improve your credit to be used for the best possible purposes.

1. Keep paying down your balances every month: One of the biggest mistakes that could hurt your credit score is not paying your balance down each month. People who don’t pay their credit card down within the agreed-upon time typically have high-interest rates and expensive monthly costs.

2. Pay your bills on time: The same goes for making payments on a bill. Not paying it within the specified timeframe will result in negative information being added to your report, further lowering your credit score. Ensure that your bank statements are accurate and that all accounts are up to date.

3. Become an authorized user: Some companies will allow customers to become authorized users after meeting certain requirements. Take a look at the terms and conditions before applying for this option. These programs usually give access to one particular service, such as checking or ATM transactions, but are helpful when you need additional coverage.

4. Set up automatic credit card payments: There are several ways to set up auto payment options on your credit cards, including sending them directly to your checking account via email or the phone. In addition, you may want to consider enrolling in online banking services that automatically make payments from your checking account into your credit card accounts.

Other tips when it comes to credit
1. Learn how to manage debt responsibly. This is true for both personal and business debts. Many people tend to spend more than they earn, especially during rapid growth and expansion. If you find yourself facing difficult circumstances, you can seek assistance by talking to friends and family members, getting professional advice, or using online budgeting tools.

2. Don’t skip any repayments. This rule applies specifically to late payments. You need to continue making regular payments, even if you’re behind by a few days or weeks. Once you miss a payment, you’ll start accumulating late payments that negatively impact your score.

3. Try consolidating your loans. Consolidation involves combining multiple small loans from various sources into one large loan, thereby lowering the total interest cost of the loan and reducing the risk associated with it.

4. Be wise with your credit report. One huge mistake most people make is neglecting to pay their bills on time or paying only the minimum due balance each month. As a result, bad information remains on their reports, impacting their scores. All outstanding balances must be paid off completely. Otherwise, negative items that remain on your report can keep you from achieving the best borrowing potential.

5. Get your questions answered. If you have any questions regarding your credit, ask for answers now rather than waiting until you’re experiencing trouble. With a little research, you should be able to learn enough to begin repairing your damaged credit report.

What to look out for that can harm your credit
1. Not checking your credit report: Most people use their credit cards frequently but fail to check their credit reports periodically. Checking at least every 12 months can give you valuable insight into whether or not there are errors on your credit.

2. Paying your bills late: Late payments can lead to hard inquiries affecting your score, which means it appears that you’ve applied for more credit elsewhere. Make sure you never miss a bill.

3 You Close Old or Inactive Credit Cards: If your close old cards, they may show up on your credit report for some time. Closing accounts can impact your score by causing “hard inquiries” that appear on your credit report. Before closing them, look for inactive or closed card accounts on your credit report.

4. You Have Negative Records: Many people think they’re protected because they haven’t had past credit problems. However, many factors may cause a “bad” rating to linger. A single application for a credit product with a low limit may count towards a negative review.

5. There Are Errors on Your Report: Mistakes such as missing debt or inflated balances can damage your credit report. Find out how much money you owe and what types of products you purchased, then try to dispute those entries on your credit report. Ensure you correct any information that needs to be corrected. Failing to do so could hurt your chances of getting approved for future credit.

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2022 ESG Investment Trends



Jay Mukhey, Senior Director, ESG at Finastra


Environmental, Social and Governance (ESG) themes have been front and center throughout the pandemic. While the framework has been surging in popularity for several years, COVID-19 served as a period of reflection causing many companies, investors and other individuals to take these factors seriously. It’s something that we can no longer afford to ignore.

Jay Mukhey

We are witnessing drought, adverse weather patterns, hotter climates, and wildfires with more regularity, raising the profile of the climate crisis. Efforts were renewed at COP26 in Glasgow last November to help address the challenge, with the signing of the Glasgow Climate Pact and agreement of the Paris Rulebook. As a result, we are now seeing record net new inflows into ESG investing and impact.


Evaluating ESG criteria

Long gone are the days when ESG issues were at the periphery of a company’s operations. In just a few short years, ESG criteria have become a key metric for investors to evaluate businesses they are considering investing in.

Investor money has poured into funds that consider environmental, social and governance issues. Data from the US SIF Forum for Sustainable and Responsible Investment shows that ESG funds under management have now reached more than $16.6 trillion. It’s not just institutional investors who are embracing ESG, with Bloomberg Intelligence predicting that savers across the world will amass £30.2 trillion in ESG funds by the end of the year.

Due to the multitude of divergent factors that contribute to a company’s success on ESG, it can be tricky to pin down exactly what criteria to measure. Depending on the industry a company operates within, environmental criteria could include everything from energy usage, the disposal of waste and even the treatment of animals.

Social criteria are primarily related to how a company conducts itself in business relationships and with stakeholders. For example, does it treat suppliers fairly? Is the local community considered when the business makes decisions that would impact them? Do they have a statement and policy around modern slavery?

While governance criteria have traditionally been an afterthought, this may be changing. Everything from executive pay to shareholder rights and internal controls are relevant to investors within these criteria.


Tracking ESG for competitive advantage

Many experts within the financial services industry point to the power of ESG as a major competitive advantage, if used correctly. It has been noted that increasingly corporations, from big Fortune 500 companies down to small scale-ups, will communicate on their sustainability metrics to grow their business and to attract talent. However, it’s no longer enough to just pay lip service to ESG issues, with abstract commitments increasingly being seen as insufficient. Companies must now quickly progress to concrete objectives that can be measured and tracked.

A wide range of data providers now offer detailed information and tools that can measure ESG performance and effectiveness. Yet major challenges remain around bringing together what is often extremely fragmented data and transforming it into actionable insights.


Focus areas for 2022

The ESG criteria that investors measure is by no means stagnant. Complex societal challenges regularly emerge that require the attention of companies. Contributors recognize several topics that demand a sophisticated approach, including the COVID pandemic, diversity challenges and powerful social movements.

Companies operating within the financial services sector face several specific challenges related to ESG, with contributors believing that fintech will also continue to play a central role in finding answers to them.
For example, industry experts expect customers to be more demanding of firms in SME lending when it comes to understanding exactly what impact they are having on the climate. For many financial services firms, 2022 will be the year that they will try to reduce the time it takes to bring ESG products and services to market, such as green loans and mortgages, as well as checking accounts with sustainability and carbon tracking capabilities.

When selecting a service provider, customers are increasingly interested in the ESG credentials of their bank or financial institution. Research from PwC finds that 80% of consumers are more likely to buy from a company that stands up for environmental and governance issues. Consumers are one of the main drivers of ESG and many are putting their money where their mouth is. It’s a trend that’s not going away; financial institutions need to start implementing their strategy for ESG now.

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