What Is The Relationship Between Security and Fraud?

It is highly likely that you have been impacted by fraud personally or you know somebody that has.

This growing trend is a worrying stat. Figures published by Financial Fraud Action UK (FFA UK) for the first quarter of 2015 found that losses from online banking fraud rose by 48% in 2014, costing £60.4 million.

In a recent survey conducted for GFI Software 47 per cent of respondents fell victim to at least one cybercrime attack in the last year alone. The most common fraud was credit card fraud, with 20 per cent of respondents having been affected in the past year.

On a personal level improved security is essential to reducing your risk of fraudulent activity.

The simplest of things can make a big difference. However it would appear from the data that complacency may be one of the more common reasons for fraud. We all know that we should change our passwords regularly, not share passwords across different accounts and make sure we have up to date anti-virus software, but do we actually do/implement these? If this is a personal approach to fraud then how are businesses looking at the problem?

Cyber security and fraud: the impact on businesses

Security in business is often looked at on risk versus reward model. The amount of monies being spent is increasing but at the same time the complexity and types of fraud are increasing as well. Businesses can no longer assume having a firewall and anti-virus software is a catch all.

“Cyber-attacks have profound consequences for the business community, whether organizations are the target, or the victim of an attack elsewhere. In the last few months alone we’ve seen major corporations targeted in systematic acts of espionage and geopolitical retaliation, as well as hundreds of thousands – potentially millions – of individuals affected by the fallout of data being stolen and misused,” said Sergio Galindo, general manager of GFI Software.

In a report carried out by BT with the help of 500 IT Decision Makers in enterprise level businesses found that:

Under a third (30 per cent) of business leaders globally see cyber security as an absolute priority. This increases to 52 per cent in Brazil and 41 per cent in the US but drops to 17 percent in the UK and 19 per cent in Germany.

In response to emerging threats, three quarters (87 per cent) of government sector IT decision-makers globally say they would like to overhaul their IT infrastructure and design it with security features from the ground up compared to 74 per cent in finance and 61 per cent in the pharmaceutical sector. This poses an interesting question. Are they more concerned because of the increase in governmental threats or because lack of investment means the current infrastructure is not suitable?

The sector that clearly sees the investment benefits is retail. It’s likely this is to do with a combination of the competitive nature of the sector, the value of security from a brand perspective and the volumes of customer data that they own.

43 per cent of retail CEOs see cyber security as an absolute priority, compared to 13 per cent of those working in pharma and 28 per cent in finance. This priority level needs to increase significantly.

europe shows a big increase detected security incidents

In a recent report by pwc respondent reports a 41% increase in detected incidents between 2013 and 2014.

It’s not just big business

A significant amount of reports and research quote the opinions and thoughts from global organisations, financial institutions and major retailers. However, the real risk could be further down the tree. Three quarters of SMEs polled by security firm Kaspersky Lab said their business is too small to be of any interest to cyber criminals and 59% said the information they hold is not of interest to cyber criminals.

These businesses are often the suppliers to the larger institutions who will now have to start looking at security from the perspective of their supply chain. In our recent blog we highlighted findings from the recently released “2015 Information Security Breaches Survey” that current and former; service providers, consultants and contractors along with suppliers, partners and even customers also pose a risk.

It is clear that from consumers to big businesses the threat of fraud is increasing rapidly, as technology develops so do the fraudsters. It is therefore key that all businesses now need to consider security as an integral part of day to day operational process and procedures in order to protect both themselves and their customers.

Are you concerned about your business security? At Secure Trading security is paramount, call us on 0808 2780252 to find out how we can help with your cyber security requirements.

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Online Fraud – What is the real financial impact