Online security is a field that should never be neglected. Businesses and individuals alike must keep up with the cybersecurity trends, or they’re exposed to significant risks. With hundreds of thousands of cases of various types of online fraud, it’s worth looking into methods to protect yourself.
As an online business owner, risk mitigation can be crucial. This is especially important in the past few years since compliance with various regulations is stricter.
Thankfully, there are numerous ways in which you can protect your business regardless of your size and budget. This article will break down some of the most common examples of banking fraud as well as innovative methods for their prevention.
Breakdown of eCommerce Security
There isn’t a website that’s too insignificant to become a hacker’s victim. Of course, there are priorities as to which websites are more profitable for targeting. E-commerce businesses always seem like juicy targets as transactions take place on their platforms.
To ensure the proper security of your website, you need to have a secure payment processor, up-to-date CMS, and plugins. The essentials of cybersecurity shouldn’t be neglected ever. Strong banking fraud prevention can make quite a difference regardless of the amount of traffic and transactions you have.
The General Data Protection Regulation (GDPR) and other international legislation make you liable for the personal and financial data of users. In the event that your company is hacked and sensitive information is exposed, you will own up to the consequences of the breach.
The repercussions of being hacked are significantly more serious than the cost of banking fraud protection procedures, regardless of how much those methods cost. It is highly likely that you will be required to pay a fine, provide refunds, or recompense your clients in some other manner if hackers take advantage of your website in order to target them.
The reputational blows that you can suffer from fraudulent activities occurring on your platform can lead to a decrease in traffic and conversions. Ensure that your business has:
- An SSL Protocol
- Security Plugins
- Up-to-date website version
Strong fraud prevention methods
Source: Freepik
With various innovations in the digital sphere, let’s cover some of the most interesting fraud prevention methods. Proper software and protocols can help you significantly in your goal of business protection.
1. Use of Fraud Prevention Systems
One of the best ways that AI can be used is in analyzing vast amounts of data. Advanced banking fraud prevention software and insurance fraud detection software have models trained on millions of transactions, allowing their software to easily flag and warn you if a fraudulent example occurs.
With the proper banking fraud detection platform, you will be able to get another look into problematic transactions and prevent them from taking place. Along with this feature, you will also receive a plethora of anti-money laundering and digital profiling options.
Fraud prevention systems are the perfect defense against modern cyber threats. However, while they can be great at recognizing fraudulent transactions, they can sometimes be unreliable and wrongfully tag transactions.
2. Regular Vulnerability Assessments
Your website needs to be examined by experts and ensure that there aren’t any vulnerabilities that can be exploited. Through automated tests of your website, you’ll get a detailed report, allowing you to take immediate steps.
There are numerous vulnerability analysis and assessment tools allowing you to find out your vulnerabilities and get a detailed insight into your company’s cybersecurity. The process of vulnerability analysis starts with discovering all the devices that are a part of your digital infrastructure.
Mobile and Internet of Things devices, as well as routers, switches, and desktops, can fall into this category. The following stage is to determine the order of importance for these assets, and then proceed to examine the vulnerabilities that they possess. After you have received a report, you will be able to comprehend the process of implementing continuous security for your specific platform.
Numerous vulnerability assessment programs offer you real-time protection as an additional function that is included in their set of capabilities. It is possible that this may considerably reduce the likelihood that hackers will exploit the weaknesses of your website and use them to commit fraudulent acts especially in banking.
3. Cybersecurity Training
If you’re running an online business, chances are that you have employees with various backgrounds. While software development companies can expect tech savviness from their employees, HRs, writers, and designers, don’t necessarily have advanced tech skills.
In case you have a large company with departments that can be vulnerable, training your employees can significantly help you. By conducting a training where you’re teaching your employees how to avoid phishing and malware, you’re creating a safe net for the worst-case scenarios.
While the first two methods are there to protect you from malware, this should help you prevent fraud targeted toward your employees.
Common Banking Fraud Examples
Source: Freepik
Covering the whole list of online banking frauds would be impossible. So, let’s focus on a couple of the most common banking frauds. Each of them is conducted in a unique way, leading to the business being harmed.
Once a hacker gets access to a vulnerability that a website has, customers can be endangered as well. Whether the hacker is after their products, finances, or connected accounts, it’s best to prevent the attack from happening altogether.
Account Takeover
There are two different types of people who can become the victims of an account takeover. In both situations, both the business and the customer can be financially damaged.
Customers can lose their accounts by becoming victims of phishing. This is a type of cyber attack where a hacker lures a user to a fake website and makes them leave their credentials. Some accounts can be hacked and accessed via lists of leaked accounts or bought by hackers on the dark web.
Another method of account takeover is when a hacker gets access to an employee’s credentials. They can then contact customers and ask for their credentials or financial details, misuse the company’s resources, and wreak havoc on the business as a whole.
Account takeover can be used as a part of a banking fraud, where an account is only used as a middleman for laundering money.
Chargeback Fraud
Chargebacks are one of the common transaction rehearsal methods. When a customer disputes a charge to receive the money, the business has to refund the full sum.
What’s problematic with chargebacks is that they lead to financial losses for the company, damage their reputation, and can lead payment processors to abolish their services to the companies.
Chargeback fraud can happen when a customer receives charges that they aren’t familiar with or if they aren’t satisfied with the product or service they paid for. This type of banking fraud can also be used by competitors to disregard the targeted business and make them lose money.
This is also problematic if someone gets their hands on a customer’s bank account. If someone accesses an individual’s bank account, they can use it to pay on other platforms. Banks are required to reverse any charges that were conducted illegitimately.
Advanced Fee Fraud
One of the most common types of banking fraud is advanced fee fraud. It’s one of the easiest frauds to conduct. All the tech terms, such as malware, phishing, and cybersecurity, are redundant when talking about advanced fee fraud.
It’s basically a type of banking fraud where the scammer asks for money in advance and then refuses to send the service or goods to the customer. Of course, this type of scam is much more sophisticated in the digital sphere.
You’ve likely heard about a Nigerian prince scam. This is an email scam where you’re connected by a member of royalty who’s looking to give you millions if you send them money first.
Some individuals who pose as recruiters can ask you for money, and they will find you a job in return. As a business, you should aim to educate your customers and let them know that you won’t ever ask them for any money in advance.
A Mix of Innovative and Traditional Solutions Is Essential for Fraud Prevention
We’ve seen how AI has changed various industries. Writing blogs, managing projects, and doing coding won’t ever be the same with handy tools such as ChatGPT. Unfortunately, AI can also be used for the worse by implementing its technology for banking fraud.
Thankfully, banking fraud prevention software is also advancing, and there are numerous ways in which you can protect your online store. Hopefully, this article has helped you understand the common problems your online business can face and how to prevent them.
Of course, there isn’t a single method that will ensure your business is 100% protected. But many of these methods can significantly increase the protection for the small price they cost.
