NICE Actimize Report Reveals Soaring Attempted Fraud Transactions in 2022

Financial institutions and consumers need to be vigilant as the latest report from NICE Actimize reveals that attempted fraud transactions increased by a whopping 92 per cent in 2022 compared to the previous year.

The 2023 NICE Actimize Fraud Insights Report also found that attempted fraud amounts have risen by 146 per cent. It’s a sign that fraudsters are becoming bolder and more sophisticated in their tactics.

The report analysed billions of banking and payments transactions representing over $110trillion in value, using NICE Actimize’s X-Sight AI. It delves deeply into the banking and payments landscape to uncover the most pressing threats and patterns impacting financial institutions.

It highlights r fraudsters pose a complex, multi-channel threat that is shaped by digital transformation, changing consumer behaviours, and shifting fraud patterns, and it’s not limited to one specific channel. The report reveals that attempted fraud amounts overtook account takeover fraud amounts, with a 45.9 per cent year-over-year increase from 2021 to 2022.

Fraud tactics

The rise of banking fraud is a growing concern for financial institutions and consumers alike. Fraudsters are shifting their tactics from traditional account takeover and unauthorised fraud to more complex authorized payments fraud (scams). This not only complicates the fraud threat landscape, but also puts financial institutions at risk of double loss scenarios – both first-party and third-party victims.

NICE Actimize, a provider of financial crime, risk, and compliance solutions, highlights the need for layering in cutting-edge technologies like machine learning (ML) and artificial intelligence (AI) to identify even the most sophisticated fraud schemes. As the world moves towards a cashless society, the volume of transactions is increasing, and so too is the amount of fraud across all channels and typologies, including online, mobile, and in-person transactions.

“The global shift to cashless transactions skyrocketed attempted fraud by 92 per cent from 2021-2022, and attempted fraud amounts soared by 146 per cent.”

One of the leading challenges facing financial institutions is money mule-related fraud. Money mules are a key element in authorised payments fraud and scams, new account fraud, and in moving illicitly obtained funds. The report explains that while mules don’t generate direct loss at an FI, they do impact revenue because these accounts aren’t profitable, are costly to acquire and maintain, and expose FIs to regulatory scrutiny and reputational damage.

The data in the NICE Actimize Fraud Insights Report shows that mule-related fraud accounts for 59 per cent of new account fraud, and the majority of these accounts exhibit mule characteristics within 30 days, suggesting that fraudsters are conducting fraud almost instantly. A mule network typically moves money within two hours before they drain the account entirely, and the funds leave the account within 12 hours.

Glaring reminder
Craig Costigan, CEO of Nice Actimize

“Fraudsters are leveraging faster payments innovation to conduct sophisticated scams involving money mules who transfer funds away from the FI-funds that are often unrecoverable,” said Craig Costigan, CEO, NICE Actimize.

“As the digital landscape evolves, so do fraudsters’ tactics. The threats identified in our report are a glaring reminder of the ever-present risk that looms over digital channels and payments. Financial institutions must fortify their defenses and review digital channel controls to stay ahead of new and emerging threats.”

The NICE Actimize Fraud Insights Report serves as a reminder to financial institutions and consumers to remain vigilant in the face of ever-evolving fraud threats.

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