Page 16 - Cyber Warnings

Similarly, financial cybercrime was the only form of economic crime to see an increase in the
last year, highlighting how online fraudsters are developing new techniques at a faster rate than
those working to stop them.

While banks have been all too pleased to champion the benefits of FinTech, they have been
less keen to discuss the increasing level - both in strength and frequency - of the attacks they
are experiencing.

In a survey conducted by the Centre for the Study of Financial Innovation, one anonymous
respondent warned about the systemic risk of “a cyber-attack so powerful on an individual bank
that it has the power to bring down the institution, necessitating a state bailout”.

Fixing the Problem

According to PwC, the prevalence - and success - of cybercrime should not be treated as an IT
problem. Rather, the firm says, financial cybercrime is an issue that needs to be addressed from
the top of each and every organization if it is to be overcome.

As if it wasn’t bad enough that more than a quarter of PwC’s respondents said they had been
affected by cybercrime, a catastrophic 18% said they did not know if they were victims of
cybercrime. In 2016, this is inexcusable.

Businesses are simply not taking the necessary precautions to prevent becoming victims to
financial fraud and cybercrime.

Social media websites are also becoming a prime hunting ground for would be fraudsters, with
LinkedIn becoming a go-to choice for those hoping to commit cybercrimes, and firms need to
educate staff about the security risks around social engineering posed by social networks.

Using fake profiles on LinkedIn, criminals can coax employees to give up vital information,
including emails, that will increase their ability to commit fraud later on.

One cyber criminal gang, Carbanak, managed to steal more than $1 billion from financial
industry businesses by using employee email address that had been willingly given up.

As in all battles, it’s important to know your enemy in the fight against cybercrime and financial
fraud. Another of the Big Four accountancy firms, KPMG, has extensively profiled those who are
most likely to commit financial crime.

The vast majority of fraudsters are male (71%) while a staggering 65% are employees at the
company they are defrauding.

Additionally, 69% of all fraudsters are between the ages of 36 and 55, meaning that businesses
are most likely to experience fraud committed by a male employee over the age of 35. Investing
security is the only way for businesses in the financial industry - as well as other industries - to
protect themselves from financial crime.

16 Cyber Warnings E-Magazine – September 2016 Edition
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