Despite the engagement of top of the range technologies and strategies to combat fraud, the banks are suffering more than ever before. As corporates and consumers continue to migrate to mobile banking for convenience, financial institutions are under considerable strain in maintaining secure technology platforms...
...says Hitesh Patel, a forensic partner at KPMG. The firm's fraud barometer, which monitors reported activity in the UK concerning alleged crimes in excess of £100,000, was released last week. While £2.5 billion worth of fraud was reported in the final six months of 2011 - five cases involved more than £50m each - the banks were the worst hit, with 59 fraud cases worth a total of £1.5billion. Economic pressures have been cited as a major factor in the increase in fraud cases but the recession has not been the only negative influence.
Mobile data communication is still in its infancy, according to Patel, and with new technology comes new opportunity for professional criminals.
"In the same way that computers were vulnerable to Trojan viruses when internet access began to reach a wider corporate and consumer audience, the same is likely to happen with smartphones and tablets. It's simply too easy for professional criminals to get hold of data - people are quick to carry it around in their pockets, but they are slow to protect it."
Employing simple security measures such as password protection and encryption on mobile devices can make all the difference, says Patel, advising corporates and financial institutions alike to be circumspect about the apps they allow onto devices.
"People think twice about the brand they buy from, so why they are willing to purchase an app without knowing much about the author is a question that could do with an answer! Until mobile technology matures we will remain vulnerable to fraud, so caution must continue to be the action of choice."
Elsewhere, the barometer also revealed that activity committed by companies' own management was the fastest growing area of fraud, with a value of £729m up from £441m the previous year. Considering it is likely that total fraud is many times higher than the cases identified in the report, reliable security steps, such as the four-eyes principle (two-man rule), are a must.