Tis the Season…for Increased Fraud Risk

With the holiday uptick in online shopping, tis the season for malicious actors to try and take advantage of your customers.

According to Bolster Research, there is a 23.5% increase in phishing and scam sites and a 21.7% increase in suspicious domain registrations in the months of November and December as opposed to every other month of the year. 

Not only are there more malicious attempts during these holiday months, their methods continue to become ever more sophisticated. The impact of these bad actors reached a new high in 2021 with nearly $6 billion in reported fraud losses by consumers.

To promote a safer holiday shopping season, financial institutions and fintechs should look to strengthen (and promote) their security practices to protect consumers and their business. Here are a few ways to do this:

Switch to authorized data connections. Only authorized third-party providers can connect to bank APIs. Consent management gives control to the end user, not allowing their data to be shared without their consent and knowledge. Connecting to financial institutions through secure connections also activates anti-fraud systems already in place.

MX offers an open finance API platform, built on FDX standards, that improves the data sharing experience between financial institutions, fintechs, and other third parties. 

Leverage Instant Account and Balance Verifications. These processes verify that the bank account number and account details are valid and that there is a sufficient balance before a transaction is processed. Verifying account details is especially important when opening a new account and moving money in order to reduce fraud.

Instant verifications solutions like those provided by MX can help organizations better manage fraud and risk, maintain regulatory compliance, and improve trust with seamless user experiences.

Eliminate credential sharing with tokenized connections. This allows you to replace sensitive data such as primary account numbers (PAN) and customer information with tokens that shield access to a customer's financial data. As a result, consumer financial data stays safe because your business partners can only interact with the tokenized version of that information.

For instance, MX Partner Tokens facilitate tokenized exchanges between MX clients and mutual payment processor partners. This enables secure, simplified sharing of actionable user data with the industry’s most trusted and reliable APIs.

Financial institutions and fintechs play a big role in powering the holiday season. With so much at stake, executives can’t afford to neglect the growing fraud threat and should take proactive action to strengthen and promote their security practices to thwart bad actor schemes.