Security vs. bad actors: The quest to stay one step ahead in this cat-and-mouse game.
by SARA KHAIRI
Fraud was, is, and will continue to be very much a part of the financial services industry.
As FIs have refined an array of tools to comprehend and thwart fraud over time, there exists an interplay — fraudsters and their tactics evolving in parallel, mirroring the advancements made by banks and firms in their quest to stay one step ahead in this cat-and-mouse game.
In 2023 alone, fraud scams and bank fraud schemes totaled $485.6 billion in projected losses globally. The biggest emerging threat is real-time and digital payments fraud. As consumers want faster transactions, the risk of fraud goes up. With the ability to move money almost instantly, there’s a faster opportunity for scams and fraud, and money flowing to and from mule accounts.
EquiLend, the securities lending platform used by many of the largest brokers, fell victim to a cyberattack that disrupted some of its systems. The firm handles trillions of dollars in securities transactions monthly with board members from top-tier Wall Street banks like Morgan Stanley, BofA, Goldman Sachs, and JPMorgan among others. EquiLend stated that it’s actively collaborating with external cybersecurity firms and advisors to probe the attack and restore online services, which might span several days before normal services are fully reinstated. The full scope of the damage remains undetermined at this time.
This also prompts the question that even with backing from legacy banks that have abundant resources and big tech budgets allocated to combat fraud, what missteps occurred, and how can FIs refine their strategies to better tackle scams?
