LexisNexis Risk Solutions Global State of Fraud and Identity Report Reveals Surge in Fraud as Digital Transactions Dominate the Global Marketplace

LexisNexis Risk Solutions Global State of Fraud and Identity Report Reveals Surge in Fraud as Digital Transactions Dominate the Global Marketplace

Ecommerce Bot Attacks Rose 155% Year Over Year as Digitally Based Businesses Face the Largest Increases of Attacks

ATLANTA, Dec. 6, 2022 /PRNewswire/ -- LexisNexis® Risk Solutions released the results of its first Global State of Fraud and Identity Report, exploring research and insights from industry experts on recent statistics and trends from our industry-recognized studies on the Global True Cost of Fraud and transaction data from over 39B transactions from the LexisNexis® Digital Identity Network® from January 2022 to June 2022.

The report demonstrates how digital transactions dominated the global marketplace as the pandemic-driven trend of consumers migrating to online interactions became commonplace behavior. Digital transactions in the LexisNexis Digital Identity Network rose by 37% YoY for the period.

Pandemic-driven digital transaction growth continued to attract fraud attacks, with global businesses recording a 32% jump in the human-initiated attack rate over the past 12 months, while high-velocity automated bot attacks were up 38% YoY.

Shifts to mobile channels continued to increase, reaching 76% of all transactions in the Digital Identity Network. Consumers today use an average of four connected devices to facilitate digital economy transactions. The addition of new ecommerce channels via marketplaces and within the wider banking ecosystem, along with a proliferation of payment options such as Buy Now Pay Later (BNPL), digital wallets and QR codes, contributed to a growth in transactions across mobile channels.

As consumers adopt multiple digital channels and payment formats, they expect a positive experience and trusted security measurements at every touchpoint. Identification and authentication solutions across the entire customer journey are becoming mandatory, as fraudsters build attack strategies at every stage. 1 in 12 new account openings and 1 in 20 password resets represent an attack.

Greater connectivity is leading bad actors to continually devise new methods and expand the complexity and scale of their attacks. Cybercriminals quickly launch complex attacks on the weakest link in the omnichannel network, targeting individuals who are newer to transacting online with less cybersecurity awareness while targeting companies that in their rush to provide consumers with digital transaction options, have not deployed adequate defences.

Large-scale cybersecurity breaches and the recent digital evolution have created an ideal incubator for scams to cultivate and thrive with identity theft. Studies show that optimizing identity verification approaches leads to safer omnichannel ecosystems.

Key Findings from the LexisNexis Risk Solutions Global State of Fraud and Identity Report:

  • Bot Attacks Continue Rising: Businesses globally experienced a 38% increase in malicious bot attacks in the past 12 months. Ecommerce businesses in particular face a bigger threat as the bot attack rate increased 155% YoY. Regionally, EMEA recorded the highest growth in bot volume (98%), followed by LATAM (83%).
  • Human-Initiated Attacks Also Continue to Grow: Human-initiated attack rate grew 32% YoY globally. North America showed the highest YoY increase of 52%, followed by EMEA (19%).
  • Fraud Evolves with New Payment Methods: Increased adoption and strong demand for contactless payment methods in APAC are major contributors to the rise of QR code fraud. QR code payments and peer-to-peer transfers are becoming the leading payment channels in Southeast Asia and India. BNPL is gaining traction globally and in EMEA particularly, leading to an increase in New Account Opening fraud.
  • Risks Across the Customer Journey: Fraud networks are increasingly industrialized and pervasive in the omnichannel digital ecosystem leading to a dramatic rise in scams including social engineering, identity theft, password reset and account takeover fraud. The escalating risk of account takeover fraud is one of the biggest threats, as mobile app logins attack rates increased 211% YoY.
  • Identity Verification Remains the Top Hurdle: Customer identity verification remains a top challenge for global businesses across APAC, EMEA, LATAM and NAM. Global businesses cited limited real-time third-party data (46%) and limited real-time transaction tracking (43%) as the two biggest challenges in verifying customer identity in online channels.
  • Industrialized Fraud Networks Attack Businesses Across Border: Fraudsters work within complex networks. Every piece of data used is linked to the next valuable piece of data on a mass global scale. Therefore, businesses and industries need greater collaboration globally to fight the fraud network but also to understand who the trusted consumers are. Gaining visibility of trusted consumers allows businesses to open up new revenue channels and upsell to a loyal consumer base.

"Digital fraud has continued to grow as economies around the world re-opened in 2022, as we anticipated in our H2 2021 Cybercrime Report. The latest surge in scams shows how the fraud landscape will continue to morph. Organizations need to use flexible fraud prevention models coupled with an adaptive authentication approach," said Stephen Topliss, vice president, fraud and identity, LexisNexis Risk Solutions.

"Using digital identity intelligence can improve the omnichannel consumer experience by providing a unified and persistent view of associated risks, helping to drive conversion rates, customer satisfaction and loyalty. A solution approach deep in layers, combining behavioral biometrics with global digital identity data and risk-appropriate authenticators, enables businesses to confidently make risk-based decisions while delivering a friction-appropriate customer journey."

Download a copy of the Global State of Fraud and Identity Report.

Methodology

The LexisNexis Risk Solutions Global True Cost of Fraud is an extensive survey of 2,952 risk and fraud executives in retail, ecommerce, and financial services/lending across APAC, EMEA, LATAM, and North American regions.

Analysis based on transactions and attacks detected by the LexisNexis Digital Identity Network (the Digital Identity Network) from January – June 2022, during near real-time analysis of consumer interactions across the online journey, from new account creations to logins, payments and other non-core transactions such as password resets and transfers. Transactions are analyzed for legitimacy based on hundreds of attributes, including device identification, geolocation, previous history and behavioral analytics. LexisNexis Risk Solutions customers benefit from a global view of risks, leveraging global rules within bespoke policies that are custom tuned specifically for their businesses.

About LexisNexis Risk Solutions 
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit www.risk.lexisnexis.com and www.relx.com.

Media Contact:
Marcy Theobald
678.694.6681
Marcy.Theobald@lexisnexisrisk.com 

 


Source: LexisNexis Risk Solutions Related Stocks: LSE:REL NYSE:RELX
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