Given the rising number of cyber attacks, businesses and organisations appear keen on investing in added network defence. According to a study by no-code decision-making platform Bureau, businesses in India will spend $7.6 billion in the next four years towards fraud detection and prevention.
“The urgency among businesses to curb digital fraud and invest in modern fraud detection and prevention practices is set to increase by four times between now and 2027,” the Bureau report said.
The total addressable fraud detection and prevention market will see a compound annual growth rate of 37 per cent in less than four years, as against $1.58 billion spent in 2022.
It’s easier today to perpetrate digital fraud as groups on the dark web and Telegram forums sell “plug and play” fraud technology, offer tutorials on how to carry out certain types of attacks, and share information about which companies to target.
“Fraudsters no longer have to be tech savvy to launch harmful bot attacks and Generative AI makes social engineering and phishing scams that much more convincing, thus harder to know which digital identities are real,” the report — The Anatomy of Fraud 2023 — said.
The US-based no-code platform offers solutions to gauge the trustworthiness of digital identities.
The banking, financial services and insurance organisations, which are the primary targets for digital attacks, lead the pack when it comes to investments in anti-fraud measures.
Together they account for over 70 per cent of all investments against digital fraud last year. E-commerce entities, also among the top victims of digital fraud, followed at 24 per cent.
The report was based on a survey of buyers of fraud detection and protection (FDP) solutions in various countries. It provides insights on the size and drivers of digital fraud in India and Southeast Asia in the backdrop of increasing digital payments.
UPI, a key target
The report showed that over 55 per cent of all digital payment fraud is related to unified payments interface (UPI).
“While the attack volume is massive the financial impact is actually relatively low. Half of the UPI-related fraud attacks tend to be less than Rs 10,000,” it said.
The report also found that account-related fraud attacks — such as fake account registrations — are the preferred type of fraudulent activity in India.
“We undertook this study to discover the magnitude of digital fraud, its effect on the digital economy, and to add to the body of knowledge about attack types and solutions,” Bureau founder and CEO Ranjan R Reddy said.
“The digital economy runs on digital identities, and fraudsters are literally banking on that. Out in the ether, anyone can be anybody. Are you really who you say you are, is the critical question that chief risk officers, CTOs, CIOs, CISOs, and their teams around the world ask every day,” he said.
“Not being able to discern which digital identities are trustworthy is the inflection point between growth and failure. All it takes is for one bad actor to launch a successful digital-fraud incursion for businesses to lose consumer trust, brand equity, and revenue — for good,” he said.
Factors driving fraud
The study details the market forces at play that are driving fraudsters to take a swing at Indian companies. This includes acceleration in digital inclusion (more new people using digital devices and services for the first time), and acceleration in digitilisation of services by businesses across sectors.
Defending digital space
The report said the government put in place fraud mitigation initiatives such as stringent KYC (know your customer) processes across digital segments.
“Fraudsters go where the money and opportunity are. The rising digitisation, digital inclusion expansion, and growing number of digital-first businesses suggest India is going to continue to be a hotbed of digital fraud,” Reddy said.