According to a survey conducted by Kaspersky Lab in collaboration with B2B International in 2014, 52% of financial businesses were forced to compensate customers due to some kind of online fraud.
In fact, the compensations were given without having substantially investigated the circumstances surrounding these events. It is noted that almost a third of companies believe that the costs arising from digital threats are smaller compared to the cost of protection. However, as digital criminals target electronic payments at an increasing rate, the above approach could translate into significant costs for these companies.
Many organizations operating in the online payments sector are prepared to accept the additional costs resulting from digital attacks. Representatives of financial companies and employees of online stores who participated in the survey confidently stated, at a rate of 28% and 32% respectively, that the total losses from digital crime, including compensation for stolen funds, do not exceed the cost of installing security solutions. At the same time, only 19% of financial companies and 7% of online stores who participated in the survey consider the costs associated with customer compensation to be among the three most serious consequences of digital fraud.
At the same time, according to Kaspersky Security Network, almost 4 million users of Kaspersky Lab products faced “financial” malware that tried to steal their money in 2013 (an 18.6% increase compared to 2012). In December 2013, several banks in North America suffered a total loss of more than $200 million due to the leakage of bank card details and personal data of their customers. However, the total losses are likely to be higher. Obviously, the continued growth of cybercrime will create a situation in which the compensations that companies will be required to pay will exceed both the costs of protecting transactions and the budgets for compensation.
“In addition to the need to set aside funds from their budgets for customer compensation, financial institutions will also have to cover the costs associated with handling customer complaints. Most importantly, even if the money is returned to victims quickly, customers will likely be very skeptical about using services again that cannot guarantee that their online accounts are safe. In general, we believe that preventing losses is clearly better than compensation,” commented Ross Hogan, Global Head of Fraud Prevention Division at Kaspersky Lab. “Custom solutions designed to protect online transactions, such as the Kaspersky Fraud Prevention platform, can reduce the risk arising from online fraud to a minimum. This means that funds that have been set aside for compensation can be freed up and used to grow the business,” he added.
The Kaspersky Fraud Prevention consists of several solutions and offers multi-layered protection against today's digital threats. In particular, Kaspersky Fraud Prevention for Endpoints offers protection for devices running Microsoft Windows, Mac OS X, Android or iOS operating systems. Kaspersky Fraud Prevention SDK tools help financial institutions develop their own mobile applications protected by Kaspersky Lab's advanced technologies. Kaspersky Clientless Engine is the server component of the platform that helps prevent illegal transactions by analyzing payment data and identifying attempted digital attacks, even if no security solution is installed on the client's device. Kaspersky Fraud Prevention includes additional services that regularly inform companies about financial digital threats and the measures that can be taken to address them. At the same time, it offers support during incident investigations.
Finally, another important reason that makes it necessary to use a special security solution is the negligence shown by customers. According to another survey , 57% of users pay little or no attention to the security of their electronic payments, as they believe that banks or online services take all the necessary security measures. This certainty increases the chances of falling victim to cybercriminals.
About Kaspersky Lab
Kaspersky Lab is the world's largest privately held computer security company. The company is among the top four security providers in the world*. Throughout its 16-year history, Kaspersky Lab has been pioneering security innovations, providing cost-effective solutions to protect consumers, small and medium-sized businesses and large enterprises. Today, Kaspersky Lab operates in 200 countries and regions around the world, providing online security to over 300 million users. For more information, visit: www.kaspersky.com.
