Wednesday, 25 April 2012

Growing threat of online fraud in banking industry as EU moves to create crime agency

Cybercrime has become the second most commonly reported economic crime affecting the banking and financial services industry, professional services firm PriceWaterhouseCoopers has concluded in a global economic crime survey. The report comes just weeks after the European Commission announced the creation of a European Cybercrime Centre.

“Cybercrime accounts for a much greater proportion of economic crime in the financial services sector than in other industries”, according to John Tracey, Partner at PriceWaterhouseCoopers. “Some of the developing technologies such as using ‘apps’ to access banking services and mobile phones to make payments are likely to increase, rather than decrease, these risks.”

According to PriceWaterhouseCoopers’ study – the largest online crime survey in a decade – online fraud and other online crime activities accounted for 38% of economic crime incidents in the banking sector compared to 16% for other industries. PriceWaterhouseCoopers analysed 3,877 responses in 78 countries around the world.

Tracey explains criminals’ particular interest in banks, payment processors and financial services firms “given that this sector holds large volumes of the type of data cyber criminals are interested in and there is an established underground market for stolen and compromised data”, he said.

Europol's HQ in The Hague
The European Commission’s announcement, on 28 March, to open a European Cybercrime Centre (ECC) in 2013 is therefore not surprising, said Tracey, since “regulators are increasingly viewing cybercrime as a key area of focus”. 

The Cybercrime Centre, which will be established within EU law enforcement agency Europol, is to become ‘the focal point in the fight against cybercrime’, the European Commission said in a statement. ‘The centre will use information from the public domain, industry, the police and academia to assist investigators, prosecutors and judges to fight online identity theft, computer fraud, credit card scams, hijacking of web accounts and attacks on public or private IT systems’. 

According to the European Commission ‘around one million people are victims of computer crime every day’ and ‘a crackdown on cybercrime will help to increase confidence in online banking…and will save millions of euros’, the statement read.

Across the pond, computer giant Microsoft announced at the end of March it had joined a number of financial institutions in the fight against cybercrime. The group of companies ‘successfully executed a coordinated global action against some of the most notorious cybercrime operations that fuel online fraud and identity theft’, Microsoft wrote on its website. On 23 March, the US District Court for the Eastern District of New York allowed Microsoft and its financial partners to conduct a coordinated seizure of command and control servers running one of the most well known viruses, Zeus. 

Michiel Willems © 2012 CP Publishing Ltd. Pictures: / /