Page 274 - Cyber Defense eMagazine Annual RSA Edition for 2024

How FaaS Impacts Businesses

Most organizations have experienced FaaS. About 56% of e-commerce businesses in a 2002 survey
reported being impacted by it. Unfortunately, it has a more significant effect than typical fraud attempts.

1. Fraud Prevention Measures Become Ineffective

FaaS will increase the number and skill level of any would-be fraudster. Considering internal audits detect
only 25% of fraud, most businesses must upgrade their detection and prevention systems. Unfortunately,
many don’t have the budget flexibility to do so.

2. The True Source of Fraud Goes Undetected

When employees, customers, vendors, competitors and lone cybercriminals operate through the same
entity to commit payroll, refund, online payment or overbilling fraud, it looks like one group is perpetrating
every attack. Because of FaaS, businesses will have more difficulty identifying the source of fraudulent
activity.

3. Businesses Experience More Fraudulent Activity

Since FaaS lowers the entry barrier for cybercriminality and draws like-minded hackers together,
businesses will likely experience an uptick in fraudulent activity. Considering that 71% of industry experts
agree an increase in volume is currently the biggest fraud-related threat, business owners are right to be
concerned.

4. Brand Reputation Dips as a Result of Fraud

A rise in the frequency and severity of client-side fraudulent activity, including online payment, identity
or return fraud, could negatively impact brand reputation. This causes businesses to lose customer loyalty
and revenue.

How to Defend Against FaaS

While businesses may be unable to pinpoint the source of FaaS schemes, they can still defend against
them with the right strategies. Data-driven automation is one of the most effective techniques. Since
machine learning models become more reliable as time passes, their fraud prevention efforts will become
increasingly accurate.

Another technology they should leverage is multifactor authentication. In 2022, over 65% of consumers
from the United States reported they positively viewed websites that offered it. This tool prevents
fraudsters from accessing accounts or systems even if they have the login information — which is vital
when more threat groups are made up of highly skilled hackers.

Businesses Must Remain Aware and Cautious

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