Digital transformation in the financial industry has triggered a significant increase in global phishing scams and cyber-attacks. To safeguard consumers from fraud, banks must enhance their security protocols.
Research from a 2022 report by Zscaler™ highlighted a 29% increase in phishing scams over the past year, resulting in a record 873.9 million attacks. The majority of these cyber scams occurred in the United States, Singapore, Germany, the Netherlands, and the UK.
Kyle Ferdolage, lead trust and safety analyst at N26, emphasizes that the mobile bank is optimizing fraud prevention technology to minimize online threats to consumers. He explains the rise of phishing-as-a-service (PhaaS), which refers to the black-market sale of tools and knowledge for executing phishing attacks. This model lowers the barriers for individuals with limited technical skills, thus broadening the scope and impact of phishing attacks.
PhaaS creates new opportunities for less sophisticated fraudsters to target victims through various scams, including phish kits and SMS phishing. Ferdolage notes that N26 is actively enhancing its technology to continuously monitor for phishing scams.
According to Ferdolage, N26 is also focused on educating customers about the latest threats and tactics used in phishing and fraud: “As a bank, we have a responsibility to help consumers understand the risks they face.”
In a landscape rife with scams, consumers must be empowered with fraud prevention strategies. Ferdolage recommends that individuals maintain a healthy skepticism toward unusual or overly advantageous offers and take their time to verify the legitimacy of requests before responding.
He advises against reactive behavior towards urgent messages and suggests contacting institutions directly via known points of contact to confirm legitimacy. Additionally, users should stay informed about evolving cyber scams and practice good internet hygiene—such as avoiding password reuse and employing multi-factor authentication for accounts.
In compliance with cybersecurity regulations, N26 encourages users to report any suspicious activity to account managers and relevant authorities. Ferdolage advocates for enhanced regulation to better protect customers amidst the growth of cross-border transactions.
He outlines three essential steps for banks to combat phishing scams:
- Continuously update cybersecurity methods to stay ahead of fraud trends and reassess internal safeguards.
- Collaborate with other banks to strengthen security technologies across the sector.
- Swiftly report suspicious activities to authorities for investigation.
N26 prioritizes investments in fraud prevention, with measures in place to ensure that only device owners can access their accounts through features like two-factor authentication, personalized security settings, and adjustable spending limits.
Ferdolage concludes, “The growth of fraud in the digital space poses a significant threat to the entire industry. In today’s fast-paced digital economy, phishing attacks come in numerous forms as scammers adapt to evade detection. Financial institutions must respond rapidly to these emerging trends. A coordinated approach across the industry—including tech companies, traditional banks, and relevant authorities—is crucial for tackling financial crime globally.”
Earlier this year, N26 announced plans to be IPO-ready by 2023.