# How can banks defend the latest generation of scam victims?
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-09
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Protecting Online Banking from Evolving Cyber Threats
Meta Description: Learn how cybercriminals are evolving to target vulnerable customers in the digital age, and how financial institutions are using behavioural biometrics to
URL: https://financedigest.com/how-can-banks-defend-the-latest-generation-of-scam-victimshtml

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_By **Gemma Staite,**_ _Lead Threat Analyst,_ _Biocatch_

Our daily routines are shifting online, and managing our finances is no exception. The days of visiting a branch for basic banking requirements are long gone, thanks to the prevalence of cashless and contactless payments, internet banking, and buy now, pay later (BNPL) services. Last year alone, [93% of customers used one or more digital payment methods](https://www.biocatch.com/resources/white-paper/4-ways-financial-scammers-are-getting-ahead?hsLang=en) and BNPL services accounted for $100 billion in purchases.

Although the popularity of [online banking may make clients’ lives](https://www.financedigest.com/the-high-street-is-dead-long-live-online-shopping.html "The high street is dead – long live online shopping! ") easier, it also increases their vulnerability to be affected by fraud. The concept of the traditional “vulnerable [customer” has changed](https://www.financedigest.com/talk-to-me-the-changing-face-of-customer-communications.html "TALK TO ME :THE CHANGING FACE OF CUSTOMER COMMUNICATIONS") as a result of significant global events and the evolution of scamming tactics. Scammers now have a much wider range of potential victims, finding new victims and taking advantage of the weaknesses of various demographics.

When fraud occurs, it’s one thing to cover a customer’s [financial costs](https://www.financedigest.com/how-much-does-cloud-based-financial-software-cost.html "How Much Does Cloud-based Financial Software Cost?"), but once consumer trust is broken and they feel that their data is not sufficiently protected, reputational damage can be nearly impossible to mend. Adding yet more layers of [security online and to applications can have the unintended consequence of undermining experience](https://www.financedigest.com/digital-experience-and-security-the-crucial-combination-for-banks.html "Digital experience and security – the crucial combination for banks") and cause users to turn to other providers.

[Financial institutions](https://www.financedigest.com/what-the-future-holds-for-financial-institutions-in-2023.html "What the Future Holds For Financial Institutions in 2023"), both established and new, are looking to new methods to protect those vulnerable to attacks, with solutions like behavioural biometrics poised to play a major role in building digital trust and safety.

**Cybercriminals: covering all bases**

The methods used by online criminals are always evolving. Although the rollout of two-factor authentication is an important step for [online banking](https://www.financedigest.com/dutch-online-bank-bunq-applies-for-u-s-banking-licence.html "Dutch online bank Bunq applies for U.S. banking licence") on a global level,  scammers are beginning to evade these security measures, degrade them, and develop more cunning methods of contacting their intended victims.

Fraud methods vary depending on the intended victim. For instance, social engineering scams, where victims are emotionally and psychologically manipulated to obtain money or confidential information, have evolved to understand human inclinations and tendencies. These schemes have [increased by 57% in 2021](https://www.biocatch.com/resources/white-paper/4-ways-financial-scammers-are-getting-ahead?hsLang=en) with an [average loss of $1,029 per victim](https://www.biocatch.com/resources/analyst-report/on-the-precipice-of-the-scampocalypse?hsLang=en), targeting consumers at the exact right moment when they are most vulnerable with the tempt of romance or friendship.

The threats do not stop here, with scammers [moving to a multi-layer hybrid model](https://www.financedigest.com/investment-advice-moving-towards-a-new-model.html "Investment advice – moving towards a new model") to defraud unsuspecting victims. Often using a mix of smishing or SMS phishing, voice scams, and remote access scams, fraudsters reach thousands of victims in minutes, use bots to intercept one-time passcodes from the victim’s device and slip past [bank security](https://www.financedigest.com/open-banking-as-a-means-to-enhance-social-commerce-security.html "Open banking as a means to enhance social commerce security") controls.

**How the ‘vulnerable customer’ has evolved**

In the [current economic landscape](https://www.financedigest.com/shelf-stable-soup-market-2022-outlook-current-and-future-industry-landscape-analysis-2028.html "Shelf-stable Soup Market 2022 Outlook, Current and Future Industry Landscape Analysis 2028"), cybercriminals are taking advantage of vulnerable and traditionally non-vulnerable individuals. This is driven by four factors – health, life events, resilience, and capability. All factors can shift suddenly and dramatically, and never in our lifetime has this been so apparent as during the pandemic.

Elderly customers remain a primary demographic for fraud, [scammed out of an estimated $3 billion a year](https://www.biocatch.com/resources/white-paper/4-ways-financial-scammers-are-getting-ahead?hsLang=en) thanks to their better credit scores, plentiful funds, trusting nature, and lack of tech knowhow. Methods most prevalent in this age group include romance scams, imposter scams, and lottery and sweepstake scams, with [40% of identity theft fraud victims being over 60](https://www.biocatch.com/resources/white-paper/4-ways-financial-scammers-are-getting-ahead?hsLang=en).

However, Gen Z have become a new target for [financial crimes](https://www.financedigest.com/financial-crime-is-the-chink-in-the-banks-armour.html "Financial crime is the chink in the banks’ armour"), primarily through social media. Younger [customers who value](https://www.financedigest.com/the-importance-and-growth-of-banking-ecosystems-to-create-superior-customer-experiences-and-value.html "The importance and growth of banking ecosystems to create superior customer experiences and value") convenience over privacy are increasingly falling prey to so-called ‘mule herders’ that slide into their direct messages, recruiting them into laundering schemes with the lure of quick and easy cash. This method can be very [challenging to detect since the scammer does not interact directly with the banking](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") platform and instead convinces the user to perform an action. Mobile malware is also a [key feature](https://www.financedigest.com/exploring-the-key-features-of-bnpl-solutions.html "Exploring the key features of BNPL solutions") in Gen Z fraud, with multi-factor authentication intercepted by scammers, hijacking their operating system through fake apps.

**Security is paramount for all customers**

As Gartner says, [don’t treat your customer like a criminal](https://www.gartner.com/en/documents/4003160). Customers want convenience, and [financial providers should be able to provide the security](https://www.financedigest.com/how-financial-services-are-overhauling-security-to-defend-against-spoofing-scams.html "How financial services are overhauling security to defend against spoofing scams") they need. If you [keep putting the onus on the customer](https://www.financedigest.com/hardsoft-keeps-customers-connected-with-block-discounting-from-siemens-financial-services.html "HardSoft keeps customers connected with Block Discounting from Siemens Financial Services") to jump through hoops, they’re going to move to a provider that takes the burden of security out of their hands.

Thanks to the dynamic nature of cybercrime, managing fraud [risk is a considerable and ever-evolving challenge](https://www.financedigest.com/5-challenges-to-overcome-in-governance-risk-and-compliance-magazine.html "5 Challenges to Overcome in Governance, Risk and Compliance-Magazine"). As scammers have got smarter, authentication methods have remained stagnant, leaving [customers vulnerable](https://www.financedigest.com/the-fca-is-taking-immediate-action-on-customer-vulnerability-but-how-does-this-impact-advisers.html "The FCA is taking immediate action on customer vulnerability; but how does this impact advisers?") to attack. To provide robust protection, [financial institutions](https://www.financedigest.com/a-cloud-migration-guide-for-financial-institutions.html "A Cloud Migration Guide for Financial Institutions") must recognise the vulnerability of one-time passcodes and knowledge-based authentication and look for solutions that go beyond the device, IP, and network-based attitudes. They must look to user behaviour to catch criminals before they strike.

Behavioural biometrics technology seeks out scammers through how they interact with online platforms, whilst ensuring that [customers still have the frictionless banking](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking") experience they desire. Working passively in the background of a user web or mobile session, this [technology monitors](https://www.financedigest.com/precise-remote-monitoring-to-steal-the-cell-separation-technologies-market.html "Precise Remote Monitoring to steal the Cell Separation Technologies Market") thousands of parameters such as pressure used when typing, how online forms are navigated and whether multiple fields are copied and pasted. For instance, in practice, behavioural biometrics can look for anomalies in digital interactions to reduce the [risk of account takeover and identify ‘mule personas’ on social media to seek](https://www.financedigest.com/france-seeks-strategy-as-nuclear-waste-site-risks-saturation-point.html "France seeks strategy as nuclear waste site risks saturation point") out potential mule herders. It can also detect potential social engineering scams, looking to typing hesitation and session length as indicators of foul play.

Scammers frequently change their strategies and targets. It has become clear that new solutions are required to protect susceptible customers as hackers are equipped with the technology to trick [financial institutions and overcome](https://www.financedigest.com/3-common-financial-hurdles-for-the-self-employed-and-how-to-overcome-them.html "3 Common Financial Hurdles for the Self Employed (And how to Overcome Them)") two-step authentication. The best approach to capture fraudsters is to watch and recognise their [online behaviour](https://www.financedigest.com/from-in-store-to-online-how-the-pandemic-affected-consumer-behaviour.html "From in Store to Online: How the Pandemic affected Consumer Behaviour"), whether it’s Gen Z falling for mule herders in their DMs or elderly victims of social engineering scams. Financial institutions can defend their clients from evolving dangers by using behavioural biometric [technology to provide seamless yet safe banking](https://www.financedigest.com/6-technology-trends-banking-2019.html "6 Technology Trends for Banking in 2019").


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