Series of three articles
Digitalization has given rise to financial fraud fueled by the increase in internet and social media users, who have become easy prey to a sophisticated group of scammers using the latest technology and legitimate platforms to lure and entrap more victims. The insurance industry is increasingly taking measures both to address cyber risk awareness and protection.
Read the first of the three series of articles on Cyber risks.
Financial fraud leads the pack in cyber crimes
Financial scams accounted for 57% of all financially motivated cyber crime in 2021 according to new research by cyber security firm Group-IB.
The research has revealed that the scam industry is becoming more structured and involves more and more parties divided into hierarchical groups. The number of such groups jumped to a record high of 390, which is 3.5 times more than 2020 when the maximum number of active groups was close to 110.
Due to scam-as-a-service (SaaS), in 2021 the number of cyber criminals in one scam gang increased 10 times compared to 2020 and now reaches 100. Traffic has become the circulatory system of scam projects.
Group-IB researchers emphasise that the number of websites used for purchasing and providing ‘grey’ and illegal traffic and that lure victims into fraudulent schemes has increased by 1.5 times in the last one year.
Scammers are evolving in 2022 on a new level of scam attack automation: No more non-targeted users. Scammers are now attracting specific groups of victims to increase conversion rates. Social media is more often becoming the first point of contact between scammers and their potential victims.
The number of brand-impersonating scam resources created per month also increased. In the Middle East, Asia Pacific and Europe, Group-IB analysts noted an increase of 150%, 83%, and 89% respectively.
While hacker groups continue successfully to attack business and government organisations worldwide, scammers have adopted their methods to improve their schemes. Chaotic loners attract organised criminal gangs with SaaS.
Group-IB deputy head of digital risk protection Antony Dolgalev said, “Scammers are now focused on attracting targeted traffic. In the past, their schemes were aimed at unsuitable users who were brought to a fraudulent resource, but since 2021 the strategy has changed drastically.”
Scammers now attract specific groups of victims to increase conversion rates. The statistics relating to grey and illegal traffic on one platform, which was taken as an example by Group-IB DRP analysts, showed that India, US and Vietnam are the main countries where the platform is distributed.
Digitalisation is the main global trend and fraud is no exception and the fact that the number of internet users increased up to 4.95bn in 2021, contributed to this. Moreover, the number of social media users and unique mobile phone users has also grown and has reached 4.62bn (+10% compared to 2020).
In 2021, 48.15% of scam schemes started with an active dialogue with the victim, experts concluded. There was also a trend to simplify scam end-pages, with scammers actively shifting towards spreading scam proposals via legitimate platforms such as Facebook and Instagram.