Digital fraud up 50% in Philippines financial sector

CEBU, Philippines —  As more consumers go online for banking and other financial transactions, study revealed that fraudsters are likewise ramping up their efforts in the financial services industry.

A new research conducted by TransUnion revealed that when comparing the last four months of 2020 (September 1 and December 31, 2021), and the first four months of 2021 (Jan. 1—May 1), the company found the percentage of suspected digital fraud attempts coming from the Philippines in financial services increased 50 percent, the highest among all industries analyzed.

Globally, the rate of digital financial services fraud attempts increased 149 percent.

Across industries, the rate of suspected digital fraud attempts globally rose 24 percent when comparing the first four months of 2021 with the last four months of 2020.

The percentage of digital fraud attempts coming from the Philippines increased 19 percent during the same time period.

TransUnion monitors digital fraud attempts reported by businesses in varied industries such as communities, financial services, gambling, gaming, retail, and telecommunications, among others. The conclusions are based on intelligence from billions of transactions and more than 40,000 websites and apps contained in its flagship identity proofing, risk-based authentication and fraud analytics solution suite.

“The rate of fraud attempts was up globally and especially in the financial services industry because fraudsters understand this is where the most high-value transactions are taking place. While this industry is traditionally known for in-person transactions, fraudsters have recognized its rapid digital acceleration and are trying to capitalize,” said Trans Union Philippines and chief executive Pia Arellano.

“We are seeing more financial services organizations implement fraud prevention solutions with some success, though our findings make it clear that this is not the time to relax. As the economy begins to open up and perform better, businesses need to do even more to ensure they are providing a secure marketplace that offers friction-right experiences to consumers,” she added.

TransUnion analyzed industries with the highest increases and declines in the percent of suspected digital fraud attempts against them, comparing the periods of Sept. 1-Dec. 31, 2020 and Jan. 1-May 1, 2021.

Interestingly, the telecommunications and logistics industries recorded the two largest declines during this period.

Additionally, TransUnion’s March 2021 assessment, which analyzed the pre- and post-pandemic declaration periods (March 11, 2019-March 10, 2020 and March 11, 2020-March 10, 2021), found the opposite with telecommunications and logistics having the two largest suspected digital fraud rate increases between the periods respectively.

Financial services had the third highest increase in the rate of suspected digital fraud during the March analysis, and jumped to the top spot this time.