Fraud is a quintessential problem in the banking world, but it’s gotten even worse. The threat landscape is fraught with new fraud types, which will only become more problematic as we face an economic downturn.
To better mitigate your risks, here are the 5 top banking fraud types to watch in 2023.

1. Social Engineering 

Social engineering exploits human errors and trust to steal private information or assets, gain unauthorized access, or commit other criminal activity.

Phishing is the most prevalent kind of social engineering technique. It involves a malicious party pretending to be a legitimate source. They might pretend to be a bank representative, tax authority, health service provider, IT team member, or anyone else you might trust without a second thought. Be wary of fake messages or emails that might have:

  • An email from a colleague with suspicious or unidentified links 
  • An email from someone outside your domain, even if it looks familiar
  • A text message requesting your personal information  
  • Your company is telling you to install software through unofficial channels 

Even the biggest companies can fall for phishing scams as they get more sophisticated. A phishing email or text can seem completely credible and may even involve several steps to lure you in.   

The moment an unsuspecting victim clicks a link, it might lead to the automatic installation of malware or create other sorts of disruptive problems. 

5 Top Banking Fraud Types to Watch in 2023

2. Romance Scams 

Love is in the air – or so many people would love to think. Unfortunately, romance scams are very common. They often involve long distance relationships, in which the fraudster might ask you for financial help or favors.

It may involve not just catfishing, but creating entire fake accounts that are often targeting more than one victim at a time. Romance scams have been on the rise since the COVID-19 lockdown. 

3. Bank Insider & Privileged User Abuse 

Insider threats can be a bank employee, manager, IT, vendors, or anyone else who is already in the bank system

Cybersecurity software and tools can be helpful when it comes to detecting insider threats. They can monitor and screen access to sensitive information or accounts, so if suspicious activity is detected, it can get flagged. 

Implementing best practices for hiring new employees can also help reduce the risks of bank insider fraud. 

4. Invoice Fraud 

Invoice fraud involves sending the victim a fake invoice from a vendor or supplier that seems legitimate, with account and payment details. The fraudster might pretend to be the usual supplier, but say that their account details have been compromised and must be changed. 

Another kind of invoice scam is a company might receive a free sample for a product and then get pestered to pay the full price for it. 

Invoice fraud can be a problem for small businesses that don’t know how to deal with it effectively. An attorney’s counsel might be necessary to handle the situation properly so the victim can reduce the risk of any legal consequences.  

Invoice Fraud Type

5. Business Email Compromise 

Business email compromise (BEC) is a kind of fraud that can cost a business large amounts of money. Some cyber criminals go for the bigger fish, so to speak. They might successfully hack a senior business executive, a CEO, or another source that is typically trusted, compromising their email so that they can defraud a company. 

Why you need to know about the top banking frauds?

It’s important to keep up with the latest information on banking fraud and how to protect yourself and your organization from fraudsters. Anti-fraud measures and awareness campaigns are two ways to spread the word about the dangers of fraud, but people are prone to trust in authority and what appears legitimate. It takes only one source of vulnerability for fraudsters to cause serious financial damage.

If you want to know more about the top banking fraud types, get the report issued by @Featurespace and click here.