Fraud-as-a-service escalates

Payments Journal: Are Financial Institutions Facing a Dystopian Future as Fraud-as-a-Service Escalates?

Financial automation systems are prime targets for intentional attacks—as well as misuse and manipulation—from bad actors. This situation is escalating for financial companies that are dependent on their bank automation systems since Software-as-a-Service (SaaS) has spurred a new movement in 2022, with financial criminals using Fraud-as-a-Service (FaaS) to make tools and services available to cybercriminals online for fraudulent activity.

Fintechs deploying SaaS to run and grow their business are finding themselves having to confront the reality of fraudsters who are deploying web-based FaaS tactics to get away with fraud at a level never before seen—and with shockingly little risk.

Is this the future of fraud for fintechs, and is there a way they can combat this new generation of fintech-focused cybercriminals who are determined to attack automated systems for their own gain?

The fact is that the level and type of crime fintechs are currently up against is a far cry from what the industry has faced in the past. Still, software is fighting software and a fintech’s own automation systems can be wielded against it. Sandwiched between AI-based onboarding systems and robotic identities that are powered by scripted behaviors or AI, the various automated steps in the onboarding process mean that once criminals have found a hole in any process, they can leverage FaaS to attack fast. [Payments Journal]