Time to Get Serious on Mobile Fraud

Time to Get Serious on Mobile Fraud

A new study suggests companies are taking the threat of mobile fraud much more seriously.

According to recent research, as mobile fraudsters are becoming more sophisticated, companies too are upping their game.  The question is: will it be enough and what can your company do right now to protect itself?

The research found that the vast majority of respondents had either already introduced a mobile payments facility (69%) or had plans to do so (23%).  85% of respondents said they viewed this as a valuable point of differentiation with customers choosing to use the function for services such as money transfers, banking services and paying for goods.

A new threat

This is good news for retailers, but with it comes a new and growing threat – mobile fraud.  While new technologies have helped curb credit and debit card fraud, the same is not always true of online or mobile payments.  As a result – this could be a major target for fraudsters in 2016, with some reports predicting mobile payment fraud to more than double over the next 12 months.

Last year, news surfaced that Apple’s Apple Pay service was being seen as a new source of revenue for fraudsters.  Criminals set up new iPhones with stolen personal information to make large purchases until the theft is rumbled.

Unsurprisingly, therefore, communications companies are taking this seriously, and the study found that companies are turning to specialists in the area.  While previously responsibility had rested with CEOs, companies are now employing dedicated fraud prevention teams.  21% of respondents were heads of fraud prevention departments, 15% described themselves as team leaders, 12% were head of a Revenue Assurance Department and 10% were fraud analysts.

The rise of dedicated professionals appears welcome but does it truly show companies are getting more serious by devolving responsibility to the specialist?  Perhaps; the success of companies working against fraud depends on how fraud prevention is integrated into the company.  For example, are CEOs actively engaged with fraud prevention departments or are they siloed away with little understanding of how they work from the top level.

The study also raised further ideas about how companies can combat fraud.  According to respondents they were worried about a range of threats including identity theft, stolen PIN codes, money theft, identity spoofing, laundering, subscription fraud, bad debt and dealer fraud.

Partnering up

Strategies appear to still be in development.  Only 30% of respondents said they were already working with a partner such as a bank or financial institution to improve security, with the other 70% saying they were simply in the process of finding a partner.

The danger is that, as with Apple Pay, communication companies will not be fully prepared for what is coming.  Fraudsters have a clear opportunity – a point where technology is offering new payment services but where providers have not fully identified every potential risk.  If you are a provider of mobile payment services it pays to ensure your security services are as robust as possible, to learn from partners and second guess every conceivable risk.