FICO’s Matt Cox unveils fraud predictions for 2024

Matt Cox, general manager EMEA, FICO offers insights on fraud predictions for 2024.

The fraud prevention landscape is undergoing significant changes in 2023. Regulators and industries are adopting new strategies to gain momentum in the coming year.

The approach to authorised push payment (APP) fraud, commonly known as scams, is undergoing a significant shift. Since 2020, the industry has shifted focus from unauthorised payment activities to detecting scams. Innovations like advanced scam detection software aim to assist financial institutions in recognising ongoing scams. This is coupled with increased efforts to educate consumers, particularly in the UK.

Despite these efforts, the scams industry continues to thrive, fuelled by the rise of alternative payment methods like digital wallets and cryptocurrency. Several countries are implementing regulatory measures to address APP fraud, with a focus on data sharing, liability, and reimbursement. The UK and Singapore have introduced new reimbursement requirements and proposed a shared responsibility framework. This emphasises organisations unintentionally receiving stolen money in “mule” accounts.

To combat the growing threat of identity theft and fraud, a holistic approach to scam prevention is anticipated in 2024, covering both inbound and outbound payments. The role of consumers is crucial. Treating scam victims differently, with specialised teams and personalised communication will influence their actions during a scam.

Breaking down industry silos is another development, particularly in addressing synthetic fraud, the fastest-growing form globally. The current siloed approach in financial institutions allows synthetic identities to go undetected. Integrating technology for real-time fraud detection with credit originations is seen as a priority, promising better detection and a more customer-centric onboarding process.

Regulators are also targeting “upstream polluters” outside financial institutions, such as social media platforms, domain registrars, and telecoms. Australia is making progress with a co-regulatory code to combat fraud collaboratively.

With the total cost of fraud globally reaching $5.4 trillion, financial institutions face challenges in meeting regulatory requirements and ethical considerations. Understanding upcoming developments is crucial to stay ahead of fraudsters, with 2024 expected to bring advancements in fraud prevention tools and strategies.

Image: © Alecu Buse’s Images via Canva

Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.