Biuro Informacji Kredytowej (BIK), the most important Polish Credit Bureau and Experian analysed the fraud trends during the COVID-19 emergency in Poland compared to EMEA and identified how organized crime adapted and created a threat scenario for the current times.
The current crisis on financial markets carries a number of threats to the global economy. It affects everyone without exception - corporations, private companies, households and individuals. It is unique at the same time, it was not caused by any financial disasters.
It is difficult to estimate the losses resulting from the rapid freezing of almost all economic activities. It is even more difficult to predict the scale of the recession, which was affected by both a dramatic drop in demand and a slowdown in supply.
Still, the impacts are like the ones experienced in previous, purely a financial, crisis also the Fraud exposures follow trends that were either known for a long time or had already started during the last year. A UK University study analysed previous recessions and accompanying fraud correlation.
Source: Centre for counter fraud studies, University of Portsmouth
Currently businesses throughout EMEA face challenges from reduced business volumes and unseen degrees of digitization. Even if the current fraud levels seem lower than in the past, they are expected to grow substantially in the near future. Today, many businesses are working to improve their fraud prevention capabilities to be prepared for increasing fraud volumes and new fraud patterns. Now is the time to start designing strategies that will prevent damage to organizations and individuals.
Marek Miller - Managing Director CEE, Experian
In the chaos caused by the threat to health and the threat of losing economic stability, criminals feel like fish in water. By using information buzz, fear of infection or job loss, they create effective social engineering campaigns to gain someone's identity, access to bank accounts and authorisation codes, and ultimately extort money.
Source: Experian Fraud & Identity consulting EMEA
During the next months, digital means for Fraud prevention will come to the center of attention. The fact that the identification of individuals, being a good customer or a criminal, is embedded digitally into the KYC processes by means of digital identity using digital biometrics, analytic and ML solutions is here to remain. Whilst the globalisation of crime was a fact before current crisis, it sees unprecedented highs recently - also this development is here to stay. The only prevention methods that go beyond single corporations’ data and insight, will prove effective – global fraud schemes will be addressed most effectively by using global insight for the prevention
The awareness of cyber threats is increasing, but it was the COVID-19 pandemic that pushed the business world to intensify efforts to strengthen protection against cyber-attacks. This applies primarily to the financial market, natural BIK playground. As one of key infrastructure entities, we support banks, other financial institutions and their clients in the area of protection. Anti-Fraud Platform and BIK Alerts are our flagship solutions successfully fulfilling clients expectations. Cooperation is the key to success in this fight, only thanks to it we can strengthen the protection of the entire sector and minimize losses.
Mr. Mariusz Cholewa, PhD, President of Biuro Informacji Kredytowej and President of the Management Board of ACCIS (Association of Consumer Credit Information Suppliers)
BIK is operating an Anti-Fraud Platform based on Experian's Hunter II system.
Since its start it has protected the Polish banking sector from frauds of the amount of PLN 252 million (updated on 30.06.2020).
Comparing the two pre-pandemic months (January and February 2020) to the early pandemic period - from March this year, the BIK Anti-Fraud Platform indicated a 35% increase in number of applications that was sent for verification in terms of detection of possible fraud attempts, while at the same time credit activity decreased due to the COVID – 19 crisis
The number of enquiries increased by 7% for the Anti-Fraud Bank Report (BRA) addressed to BIK Anti-Fraud Platform by banks during the pandemic period – it proofs that during the COVID-19 crisis such a sectoral solution is becoming even more needed to reduce fraud losses.
As the financial institutions become more cautious and use the PAF system more frequently.
Obviously, business moved to online channels – the number of cases related to the electronic devices used by the client in the process of applying for credit are clearly confirmed by the CFD BIK Platform (The Cyber Fraud Detection Platform detects and analyses financial data and transactions through electronic devices).
The CFD Platform confirms an increase of 212% during the COVID-19 crisis of applying for credit products through online channels.