Highlights from the 2024 NICE Actimize Fraud Insights Report, First Edition

Shifting fraud dynamics can undermine a financial institution’s current fraud controls. The fraud prevention landscape can change so quickly that it takes constant vigilance to thwart emerging threats. Insights into these breaking trends and analysis on how current controls are working can be found in the 2024 NICE Actimize Fraud Insights Report, First Edition. Not only does it highlight payment trends, this report provides fraud fighters with some strategies needed to appropriately respond to new threats while underscoring the importance of proactive measures in combating fraud effectively. Discover the key takeaways from the report in this 4-minute read.

Evolution of Fraud Attacks

The fraud prevention battleground is undergoing a transformative shift spurred by technology innovation and faster payment rails. Fraudsters are veering away from conventional tactics like Account Takeover (ATO) toward forms of authorized fraud, targeting a firm’s customers directly to sidestep an institution’s fraud controls. Advancements in technologies such as generative AI enable fraudsters to deploy increasingly convincing tactics—from polished AI-generated phishing emails to deep fakes—that challenge an FI’s defenses.

Impact of Payment Trends

Against a backdrop of rapid payment innovations that include Real-Time Payments (RTP) and international standards like ISO20022, FIs must mitigate fraud risks at the speed of instant payments. Technology advancements are a double-edged sword offering greater convenience and efficiency, but FIs are discovering fraudsters exploit any vulnerabilities as they test for systemic weaknesses.

Positive Trends and Challenges

FIs that invested in fraud detection technology, though, showed positive results. There’s a noticeable decline in certain fraud typologies, such as P2P fraud, thanks to these improved detection mechanisms. However, this progress is tempered by other fraud types gaining traction, emphasizing the need for continuous improvement.

Regulatory Shifts and Liability Concerns

Disruption in the fraud landscape is just around the corner thanks to the global regulatory shift toward greater liability for authorized fraud and scams. Notably, the impending regulatory changes in the UK—where FIs will bear 100% liability for fraud losses—will require firms to make substantial investments in detection capabilities and compliance measures to mitigate their risk.

Detailed Analysis of Fraud Typologies

Authorized Fraud and Scams

The report identifies an increase in romance and investment scams, driven by criminals adopting more sophisticated fraud tactics and the growth of citizen fraudsters. FIs must tailor their fraud prevention strategies to each fraud typology to effectively combat against a plethora of scams.

Social Media’s Role in Scams

Social media is fertile ground for fraud schemes that run the gamut from purchase, romance and investment scams to phishing and social engineering attacks. The integration of social engineering techniques into these platforms poses a formidable challenge for fraud fighters who seek to protect even the most tech-savvy customer from believable scams.

New Accounts and Mules

A pressing concern for FIs is the infiltration of money mules. With impending liability shifts, FIs will need to execute strategies to detect and prevent mule activities to mitigate financial losses.

Check Fraud

Despite advancements in digital payments, traditional check fraud continues to pose significant threats, particularly in the US and Canada. The report highlights trends in these areas and emphasizes how firms must invest in strong fraud prevention measures tailored to each transaction type and channel to combat this old school type of fraud.

Account-to-Account Fraud

Faster payments usage reshaped account-to-account fraud, particularly with international wires where there’s been a significant drop in genuine usage. The average fraud values dropped nearly 40%—a sign of fraudsters abiding by payment limits and rules to avoid detection.  Teams must fully understand these dynamics and leverage advanced AI for real-time detection, decisioning and continuous adaptation to ensure sophisticated fraud schemes are identified fast and mitigated. 

Statistical Insights

State of Fraud Comparison (2022 vs. 2023)

• Total fraud trends: +6% in value, -26% in volume
• Authorized fraud trends: +11% in value, +22% in volume
• Unauthorized fraud trends: -33% in value, -12% in volume
• International wire/cross border payment fraud trends: -36% in value, +2% in volume

• Domestic wire / domestic bulk payment fraud trends: +7% in value, +34% in volume

• Zelle fraud trends: -24% in value, -36% in volume
• Check fraud trends: +31% in value, +4% in volume 

The Future of Fraud Prevention

The 2024 NICE Actimize Fraud Insights Report, First Edition, paints a comprehensive, global picture of the evolving landscape of fraud attacks. As the financial industry navigates the complexities around faster payments, regulatory shifts, and technological advancements, developing proactive and adaptive fraud prevention strategies will determine who will successfully block new threats.

By leveraging advanced technologies and NICE Actimize’s collective intelligence, FIs can fortify their defenses against these sophisticated, scalable fraud threats, ensuring robust protection for both their institutions and their customers.

While great progress has been made in certain areas of fraud prevention, the dynamic nature of fraud warrants continual innovation and collaboration across the industry. This is how firms can stay ahead of malicious actors and safeguard financial ecosystems effectively.

To get all the expert insights, download your copy of the report.