Battling Large-Scale Digital Fraud Attacks in Finance and Retail: A Case for Socure's Sigma Identity Fraud Solution

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With the growing reliance on digital platforms, financial institutions and retail merchants have become lucrative targets for large-scale digital fraud attacks. These attacks are executed by cunning cybercriminals who exploit vulnerabilities to gain unauthorized access to sensitive information, resulting in significant financial losses and reputational damage. In this blog, we will delve into the gravity of the issue, citing relevant metrics, and exploring how <a href="https://www.socure.com/products/sigma-identity-fraud">Socure&#8217;s Sigma Identity fraud solution</a> is instrumental in combating this rampant threat.
<h2>The Escalating Scale of Digital Fraud Attacks</h2>
Over the past few years, the scale and complexity of digital fraud attacks have risen exponentially. According to a <a href="https://aag-it.com/the-latest-cyber-crime-statistics/">report published by AAG</a>, 60% of U.S. organizations have had their data encrypted in successful ransomware attacks. Most concerning, one in 10 U.S. organizations are absent of insurance coverage against cyber attacks.¹
The result? Massive volumes of <a href="https://www.socure.com/glossary/personally-identifiable-information">personally identifiable information (PII)</a> being sold on the dark web. This leads to large scale <a href="https://www.socure.com/glossary/identity-fraud">identity fraud</a> and <a href="https://www.socure.com/glossary/account-takeover">account takeover</a>, through which illegally obtained data is used to make unauthorized purchases or to conduct malicious financial transactions. 
Financial institutions and merchants are often left to front the bill for resulting chargebacks and disputes. According to Juniper Research, the total cost of ecommerce fraud to merchants will exceed $48B globally in 2023 (an increase in $7B from last year), with North America making up 42% of global fraud.²
<h2>Understanding the Fraud Impact on Consumers</h2>
These large-scale fraud attacks not only hit financial institutions and retail merchants, but also have a profound impact on consumers. 
An estimated 53.35 million U.S. citizens were affected by cyber crime in the first half of 2022, leaving innocent victims in severe financial and emotional distress.¹ However, when retailers employ stringent security measures in response to fraud attacks, the customer experience may suffer, with genuine transactions being mistakenly flagged as fraudulent and declined, causing frustration and inconvenience. 
<h2>The Solution: Identity Fraud Detection Software</h2>
Socure’s suite of fraud and risk solutions are designed for progressive identity verification, soliciting minimal consumer PII in exchange for incremental value, in alignment with the riskiness of the transaction. This maintains a friction-free experience for consumers, while providing institutions with the assurance they seek. 
When faced with large scale digital fraud attacks, our Sigma Identity fraud solution is a game-changer for mitigating risk and ensuring a smooth and secure digital experience for financial institutions, retail merchants, and consumers.
<h2>A Success Story: Large Retail Card Portfolio Client</h2>
Socure&#8217;s Sigma Identity fraud solution was put to the test when a large retail card portfolio client faced a staggering increase in its fraud rate: from 0.36% to 11.7% of transactions in just one month. 
This exponential rise was nothing short of a crisis that required immediate action. The retailer&#8217;s initial response was to implement fierce friction measures to combat fraud. Unfortunately, this approach led to numerous card transaction declines for genuine consumers, resulting in dissatisfaction and potential loss of valuable customers.
Enter Socure&#8217;s Sigma Identity fraud solution. By leveraging advanced <a href="https://www.socure.com/glossary/machine-learning">machine learning</a> algorithms and sophisticated data analytics, Socure was able to reduce <a href="https://www.socure.com/glossary/false-positive">false positive</a> denials by approximately 61%. This improvement enabled the frictionless onboarding of trustworthy consumers, ensuring that legitimate transactions were not blocked due to mistaken suspicion.
Moreover, Socure&#8217;s solution significantly enhanced the fraud capture rate, detecting approximately 23% more fraudulent actors compared to the legacy fraud prevention provider used previously. 
This breakthrough allowed the retail client to pinpoint and neutralize fraudulent activities more effectively, safeguarding both the institution and its customers from potential losses.
<h2>Building a Trustworthy Ecosystem</h2>
Large-scale digital fraud attacks pose a substantial threat to financial institutions, retail merchants, and their customers. With the relentless advancement of technology, it is essential for businesses to adapt their fraud prevention strategies accordingly. 
Socure&#8217;s Sigma Identity fraud solution has proven to be a vital tool in the fight against third-party fraud, protecting institutions, and consumers alike. By embracing cutting-edge <a href="https://www.socure.com/glossary/identity-fraud-detection-and-prevention-software">identity fraud detection software</a>, financial institutions and retail merchants can reinforce their security measures, creating a safer digital landscape for all.
¹ Griffiths, C. (2023, July 5). The latest Cyber Crime Statistics (updated July 2023): Aag it support. AAG IT Services. https://aag-it.com/the-latest-cyber-crime-statistics/ 
² Smith, S. (2022, October 12). ECommerce losses to online payment fraud to exceed $48 billion globally in 2023. Juniper Research: Experts in Fintech, Telecoms &amp; IoT Markets. https://www.juniperresearch.com/press/ecommerce-losses-online-payment-fraud-48bn#:~:text=16%25%20Growth%20in%20eCommerce%20Fraud,over%20%2441%20billion%20in%202022.

Battling Large-Scale Digital Fraud Attacks in Finance and Retail: A Case for Socure's Sigma Identity Fraud Solution

Emily Saitta

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