Why Aite-Novarica’s Fraud Trend Report is 2023’s Best Fraud Prevention Guide Yet

Each year fraud leaders face a new version of the same challenge—finding and preventing the most dangerous fraud attack vectors.

Fraudsters are always developing new, sophisticated methods to exploit financial institutions’ vulnerabilities. But 2023 is a bit different. The trends show that instead of devising new schemes entirely, fraudsters are doubling down on their old methods and wreaking havoc as a result.

That’s where it helps to have a guide to not only track these trends but predict the biggest threats on the horizon. Aite-Novarica Group’s (ANG) fraud trends report for 2023 is the best guide yet because it does exactly that.

Here’s how it can help inform both fraud prevention planning and tech stack decisions for your institution.

Everything Old is New Again

The report is aptly named “Everything Old is New Again,” as you’ll discover upon reading the research compiled within it. ANG surveyed 34 U.S. fraud executives, all of whom reported an increase in fraud at their institutions. In fact, check fraud, P2P fraud, ACH fraud, and credit/debit card fraud were all higher in 2022 compared to 2020. This is significant because while fraud did increase in 2020 due to the pandemic and associated economic factors harming consumer confidence, it still continues to climb even as economic conditions have improved. In most cases, these fraud types have increased by more than 10%.

However, one fraud method stands out above the others. Check fraud, both first and third-party, has skyrocketed. Nearly half of all executives reported a double-digit increase in both. Several executives at large institutions noted that first-party check fraud has reached “uncomfortable levels” of growth.

Right alongside check fraud rapidly increasing as a choice for fraudsters is authorized payment fraud. Through simple social engineering scams, fraudsters can take advantage of real-time payments and vulnerabilities in financial institutions’ technology and review processes to steal from good customers.

Though these fraud types aren’t entirely new, the methods that fraudsters rely on are increasingly complex and difficult to detect.

Protecting customers while preventing fraud

Nearly every executive who participated in the report strongly expressed they are, as one put it, “caught between a rock, a hard place, and a meat grinder” when it comes to protecting customers and improving efficiency while also avoiding losses and minimizing risk.

Losses continue to pile up for FIs, as more than three-quarters of all executives reported an increase in both online and mobile losses. Again, old fraud methods rear their ugly heads and affect both customers and institutions. Compromised payment methods and outright theft, be it of checks or customer information, have been mainstay schemes for decades.

When customer information and security are at risk, customers have less confidence in institutions. On the other side of the coin, customers also lose confidence in institutions that cannot provide modern solutions which prioritize customer convenience, like real-time payments.

Add to that the significant rise in check-fraud thanks to fraudsters’ new and sophisticated methods, and the problem becomes even harder for institutions to solve.

Fraud trends beyond 2023

As promised, this report isn’t just about the fraud trends that are currently leading threats. Taking the long view on fraud evolution and plotting the trajectory of different fraud types takes an expert eye. So how does ANG’s report predict the trends that will be the biggest threats in the years ahead?

Simple—by focusing on what industry factors and institutional vulnerabilities have guided fraudsters’ actions so far.

Get ahead of fraud by strengthening your stack

ANG’s fraud trends report explores not just the rise of these types of fraud, but which will continue to pose a significant threat beyond 2023. That information is invaluable for a fraud fighter. It allows you to prepare defenses in time to still prioritize customer experience and build a solution that both pleases your customers while sending fraudsters packing.

In addition to learning which fraud types executives predict will be the top threats to watch, ANG’s guide will also show you where these experts are investing to strengthen their tech stacks. As fraud leaders at major financial institutions, their decisions on investment carry significant weight. That makes them a powerful example to follow for your own fraud stack.

Download and read the full report completely free, and start acting on these invaluable insights to prepare your institution for fraud in 2023 and beyond.