What’s Coming for Fraud in 2024? (According to the Experts) [Part I]

In this first part, we present the new trends in fraud observed in 2024 and the concepts of branch professionals at the forefront of these trends. In the second part, we present the main difficulties that fraud teams will face next year and the key technologies that will be in their footsteps to address the concerns in terms of fighting fraud.

In 2023, the economic sector suffered significant losses due to fraud. According to the Nasdaq report "World Money Losses Report 2024", the total losses worldwide exceeded $485 billion. This brings into focus the scale of the challenge that is important to us: the fight against fraud does not require a rudimentary response, but a proactive strategy.

I consulted seven leading specialists in the fight against fraud from different sectors of the economic world. They shared their own observation of the relatively correct wave of fraud schemes, the main tasks facing the mission of fighting fraud, and new technologies that change our defense strategies.

Let's explore these concepts together from the professionals and prepare for the conclusion and overcoming of the tasks related to fraud prevention in the coming year. For me, this will actually be cognitive for you.

What is the next big fraud scheme to look out for?

Let's start with this, so as not to become one of the new schemes of fraud, while following in the footsteps of those who should be careful. Attackers diversify their methods, hone their professionalism and specialize in certain types of attacks. The general wish is this: at the fastest, we will be witnesses to the evolution and emergence of fresh attack vectors in all kinds of fraud targeting a wide range of sectors of the economy.

Identity crimes will reach new levels

To understand the difficulties of advanced financial cruelty, I first consulted with Dominique Hurtubise and Eric Lachapelle, partners at KPMG and experts in the fields of regulatory relations and financial cruelty.

At the same time, we wanted to ask Eve Velazquez, Executive Director of the ITRC (Resource Center for Combating the Proceedings of Own Data), to express a unique perspective aimed at victims of fraud. The ITRC has an important role to play in raising awareness of the methods of fraud and in proposing assistance to victims. Often, the assessment of fraud is limited by the economic consequences and overlooks the underlying social consequences of fraud that affect us all. Velazquez, in another, focuses on this: "[...] the sensual damage from the atrocities caused by the introduction of our own data continues to grow, in fact our final report on the impact on customers, where 16% of respondents are said to have considered suicide as a result of being a victim of the atrocities caused by the introduction of their own data, is a growing concern.

KPMG experts and ITRC experts agree. By 2024, the number of crimes related to the introduction of stolen data, synthetic data, and both proprietary data will increase.

“ The ITRC believes 2024 will see new levels of identity crimes (particularly impersonation and synthetic identity fraud) due to a record number of data breaches in 2023 by financially motivated and Nation/State threat actors.

-Eva Velasquez, ID theft Help Center CEO

Neil Ford, a specialist in IT Governance risk management and IT governance, says. This promises to increase the number of atrocities against individuals. Such crimes have steadily increased for the past 20 years, accelerating after 2020, and this trend will not weaken. The scammers are making more profits and becoming more common. But that doesn't mean that fraud has stopped developing. We have already witnessed the rise of the dangers of the very sophisticated new generation.

AI-driven identity fraud and AI-enabled scams will rise

All experts we heard have expressed concern about the use of artificial intelligence to strengthen and adapt existing fraud. The fake intelligence was fraudulent by 2024, from the creation of a more perfect fake ID to the use of a generous AI in online communication, and the use of a deep fake targeting vulnerable victims. It will play more and more important roles.

KPMG’s Dominic Hurtubise and Éric Lachapelle raised concerns about the increasing prevalence of AI-enabled scams, predicting a rise in sophisticated methods such as deepfakes and trojanized AI apps.

We started monitoring how the scammers use AI, but it was not always the way we imagined. Although there is no significant change in the scam itself, AI, like Hurtubise and Lachapelle, enables more targeted personal attacks. Deep fake and generational AI can make the situation more credible, such as trying to deceive CEOs or try romance fraud.

Velasquez highlights the often-underestimated threat of targeted attacks. Such scams are evolving, using generative AI to craft more sophisticated phishing lures. Misinformation and disinformation are generative AI’s most significant risks.

In addition, the use of LLMs by criminal groups trying to automate online attacks by interacting with victims and ambitious organizations.

To better understand the impact of these new technologies, I talked to a specialist in Bell Canada's corporate security and misconduct, which is familiar with communication technology and security. Alexander Gilad, a senior manager in charge of artificial intelligence at the Ant i-Skum Center for Corporate Security, emphasized important points:

“ I would pay close attention to the type of fraud we feel is most familiar and under control […], especially anything related to phishing [due to the risks posed by] the use of different techniques that are becoming increasingly sophisticated […]. A good example is the creation of very realistic web portals using image and content generation capabilities from generative AI tools to then capture credentials of legitimate users.

-Bel Canada, Ant i-Scam Center, Alexander Jirad, a senior manager in charge of artificial intelligence

His colleague, Yann Saint-Cyr, senior manager of fraud monitoring and detection, has noted his own extensive experimentation with countering similar options. Saint-Sir said the rapid development of speech synthesis technology highlights the need for financial institutions to prepare for future attacks using these new technologies.

“ In 2024, watch for more sophisticated phishing attacks and deepfake-related fraud, a trend observed in 2023. Existing scams such as impersonation (false representatives, bank investigators, etc.) will continue to gain in momentum and will become harder for the general population to detect.

-Yann Saint-Cyr, senior manager of fraud control and identification, Bell Canada

A former RCMP investigator into Henry TSO licensed crime and money laundering said licensed crime is charged by most of all funds from fraud and drug trafficking. Another decade ago, the Central Department Store found that criminal cartels are increasingly actively involved in fraud. According to the text, "organized crime has actually realized that fraud is its path to success." The exchange of fees and penalties in fraud is much more sophisticated than other crimes.

“ The vulnerabilities in human psychology have allowed scams to flourish for a long time. But in recent years (and years to come), scams have evolved into large-scale organized crime. Scams are a societal crisis that consumers will expect to be protected from better, whether it’s education or tools and tech at the businesses they interact with. You add in Gen AI and the roadmap for scammers is bright and profitable.

-Jay Rockall, co-founder and chief scientist at fraud. com

We've been seeing these developing technologies for a long time. When I was first asked to comment on the risk of counterfeiting for financial institutions in 2019, I said that before they do that it will not be another five years of big work. The data on advanced attacks, at the moment, remain in either because we calculate the right introduction of fraudsters when the development becomes very affordable.

Large organizations are therefore obliged to understand the dangers and strengthen their own protection now, in preparation for the inevitable increase in fraudulent attacks that will come with the introduction of artificial origins of mind. There is no silver bullet in the technology of preventing fraud. The very strong bond of the first method has the capacity to lead to significant challenges. As a result, the group strategy of fighting fraud connects various, current tools with the way of personality testing, where and how they interact with the organization.

Stolen identities will expedite the return of check fraud

Fraud Strategy Consultant Alexander Hall's perspective is always instructive in understanding the changing financial fraud landscape. He offers a unique perspective on how criminals operate. One interesting thing I've been noticing is the resurgence of stolen checks and check fraud in general. This type of fraud seemed like a thing of the past. Just 15 years ago, it seemed like the fraud had become another chapter in the history books. But in recent months, criminals have revived it in combination with identity theft. In the past 6-12 months, we've seen an increase in cases where fraudsters are showing off stolen checks and mail keys, and financial institutions are struggling to keep up. This trend is not slowing down, but rather slowing down.

Hall predicts that the biggest fraud schemes in 2024 will involve hacked identities and stolen checks. In his words

“ The vulnerabilities in human psychology have allowed scams to flourish for a long time. But in recent years (and years to come), scams have evolved into large-scale organized crime. Scams are a societal crisis that consumers will expect to be protected from better, whether it’s education or tools and tech at the businesses they interact with. You add in Gen AI and the roadmap for scammers is bright and profitable.

- Alexander Hall, Fraud Prevention Strategy Consultant, Dispute Protection Advice

Innovative fraud prevention strategies are needed to detect these mule accounts before they can be exploited by criminals. This challenge becomes even more challenging and urgent as financial institutions are forced to digitize transactions, reduce friction, and speed up access to funds.

SMEs’ ​​efforts to improve digital authentication processes could unintentionally benefit fraudsters. The evolution of Fraud-as-a-Service (FaaS) leveraging generative artificial intelligence is expected to increase the scope and sophistication of these fraudulent activities, creating a major challenge for banks to distinguish legitimate from fraudulent activity.

This trend highlights the urgent need for banks to adopt advanced fraud detection and prevention strategies, such as real-time monitoring and behavioral biometrics. Such measures should also aim to accurately identify the origin of open accounts (to prevent the creation of mule accounts) and the origin of transactions. The adoption of a fraud responsibility shared model, such as the UK’s, reflects a move towards a more proactive approach to fraud prevention that calls for a shared responsibility for detecting and mitigating fraud.

First-party and friendly fraud will continue to grow

During the social and economic confusion, frauds involved in friendly and senior executives generally increase. Considering that the current financial situation will not improve even in 2024, more and more conscientious people will decide to dye their "trivial" fraud.

These attacks will be more and more difficult to discover because information on the execution method (not just the dark web) can be found within a few minutes online. With the socialization of fraud and the rise of the servic e-type fraud service, anyone can easily play a part of small fraud. Detailed e-books, instruction programs, and almost all other things described in ste p-b y-step about the return of product return fraud and return policy are overwhelmed by the alerts that the fraudulent team should be inspected and the small incidents to be investigated. The result is.

Introducing the rea l-time rail (RTR) directly payment system will shorten companies and financial institutions to greater risks, as the resonance time to obtain verification is shorter.

In accordance with the claims of British payment system regulations (PSR) scheduled to be implemented in October 2024, both the reimbursement side and the receiving side may compensate for the loss caused by the purchaser as a result of the fraud. It is required. There is a similar request in the United States. The major bank has agreed to compensate for the victims of Zelle fraud. This shows a wider range of shifts in the direction of strengthening financial institutions' responsibilities for the cost of the buyers affected by fraud.

“ The UK has announced a new liability scheme that will come into force in October 2024 that requires the sending & receiving institutions to refund reported scams & share any losses reported by consumers 50/50. Similarly in the US, the top banks have decided to begin refunding Zelle scam victims. We may anticipate more friendly scams, where someone falsely claims they didn’t make a payment to try and get reimbursed from the banks.

-KPMG's Canadian partner Dominik Fult Beads and Eric Rasha Chapel have advised on risks, compliance and financial crimes.

The shift to a victi m-friendly regulation, and its responsibilities are in financial institutions, so it should be forced to review fraud prevention strategies. When the time to act more aggressively comes, can the necessary means be used, or financial institutions remain in the passive catchup mode and take more effective fraud prevention measures only when needed? There is a question that it will not be broken. Apart from that, how can we distinguish the friendly scams that seem to increase as the number of people continues to be severe for many people in 2024? < SPAN> During the social and economic confusion, frauds involved in friendly and senior executives generally increase. Considering that the current financial situation will not improve even in 2024, more and more conscientious people will decide to dye their "trivial" fraud.

Cryptocurrency fraud will not slow down

These attacks will be more and more difficult to discover because information on the execution method (not just the dark web) can be found within a few minutes online. With the socialization of fraud and the rise of the servic e-type fraud service, anyone can easily play a part of small fraud. Detailed e-books, instruction programs, and almost all other things described in ste p-b y-step about the return of product return fraud and return policy are overwhelmed by the alerts that the fraudulent team should be inspected and the small incidents to be investigated. The result is.

Introducing the rea l-time rail (RTR) directly payment system will shorten companies and financial institutions to greater risks, as the resonance time to obtain verification is shorter.

“ […] people may be interested to seek refuge in cryptocurrencies; however, the fraud trends related to crypto-wallets and crypto-exchanges notably will continue to rise as crypto hits the headlines.

In accordance with the claims of British payment system regulations (PSR) scheduled to be implemented in October 2024, both the reimbursement side and the receiving side may compensate for the loss caused by the purchaser as a result of the fraud. It is required. There is a similar request in the United States. The major bank has agreed to compensate for the victims of Zelle fraud. This shows a wider range of shifts in the direction of strengthening financial institutions' responsibilities for the cost of the buyers affected by fraud.

-KPMG's Canadian partner Dominik Fult Beads and Eric Rasha Chapel have advised on risks, compliance and financial crimes.

The shift to a victi m-friendly regulation, and its responsibilities are in financial institutions, so it should be forced to review fraud prevention strategies. When the time to act more aggressively comes, can the necessary means be used, or financial institutions remain in the passive catchup mode and take more effective fraud prevention measures only when needed? There is a question that it will not be broken. Apart from that, how can we distinguish the friendly scams that seem to increase as the number of people continues to be severe for many people in 2024? During the social and economic confusion, frauds involved in friendly and senior executives generally increase. Considering that the current financial situation will not improve even in 2024, more and more conscientious people will decide to dye their "trivial" fraud.

These attacks will be more and more difficult to discover because information on the execution method (not just the dark web) can be found within a few minutes online. With the socialization of fraud and the rise of the servic e-type fraud service, anyone can easily play a part of small fraud. Detailed e-books, instruction programs, and almost all other things described in ste p-b y-step about the return of product return fraud and return policy are overwhelmed by the alerts that the fraudulent team should be inspected and the small incidents to be investigated. The result is.

Introducing the rea l-time rail (RTR) directly payment system will shorten companies and financial institutions to greater risks, as the resonance time to obtain verification is shorter.

In accordance with the claims of British payment system regulations (PSR) scheduled to be implemented in October 2024, both the reimbursement side and the receiving side may compensate for the loss caused by the purchaser as a result of the fraud. It is required. There is a similar request in the United States. The major bank has agreed to compensate for the victims of Zelle fraud. This shows a wider range of shifts in the direction of strengthening financial institutions' responsibilities for the cost of the buyers affected by fraud.