Holiday season is scam season, and this year, all hackers want for Christmas is your mother’s maiden name and the last 4 digits of your social security number.
Holiday Fraud Figures:
- Digital identity fraud spikes 15% during the holiday season. (TransUnion, 2023)
- 1 in 3 Americans fall victim to online shopping scams during the holidays. (Norton, 2022)
- Phishing alerts surge 46% in December compared to the monthly average observed throughout the year. (Cyberint, 2023)
Financial institutions – especially smaller organizations like credit unions – are the #1 target of digital identity fraud. With consequences like financial losses, reputational damage, regulatory penalties, operational disruptions, customer attrition, and more, the impact of digital identity fraud on banking businesses can be devastating.
Don’t let your organization become an easy target for hackers this holiday season. Here are 5 fraud prevention strategies you can leverage to prepare your business for fraud’s busiest season:
1. Implement Vulnerability Management
82% of breaches in 2023 involved vulnerabilities in software that had patches available but were not applied.
(IBM, 2023)
Time is money; this is especially true when it comes to threat detection within your systems. To stay ahead of threats, organizations should implement a robust vulnerability management system as part of their fraud prevention strategies to perform regular automated vulnerability scans of applications, computers, and third-party services, followed by timely patching of vulnerabilities.
2. Secure Third-Party Vendors
63% of data breaches are linked to third-party vendors.
(Verizon, 2023)
The number of third-party vendors contracted by the average credit union is in the hundreds. To hackers, each of these relationships represents a chink in the armor of an organization that might otherwise be very difficult to infiltrate. Your business partners may not be as prepared to detect and take action against fraudulent activities as you are, which is why they should always be looped into your secure access management strategy. A third-party cyber risk management program extends your security perimeter to each of your vendors, ensuring there are no holes in your fraud management strategies.
3. Prepare An Incident Response Plan
35% of credit unions experienced >1,000 fraud attempts in the last year, and 1 in 10 experienced >10,000.
(Alloy, 2024)
It’s not always possible to avoid security breaches, but a solid incident response plan can help mitigate damages and reduce recovery time. A response plan should include these items at minimum:
- A designated response team with clear roles and responsibilities
- Clear definitions of risk tolerance for the business
- A clear system for classifying risks as high, medium, or low
- Detailed procedure outlining the steps each member of the response team should take when an incident occurs
4. Invest In Threat Monitoring
272 Days Is the average amount of time it takes an organization to detect and contain a security breach. Organizations that detect and contain a breach within 200 days save an average of $1.76 million compared to those that take longer.
(IBM 2024)
Threat Monitoring provides real-time visibility into network activities and allows organizations to spot potential risks that may not have been stopped at the door. Where identity plays a crucial role in ensuring efficient and accurate monitoring, ITDR is the gold standard of threat monitoring for fraud prevention strategies. This operational identity security discipline leverages behavioral analysis to rapidly detect and respond to suspicious activity within an organization’s digital environment.
5. Prioritize Employee Education
In 2024, 71% of working adults admitted to taking risky actions, such as reusing or sharing a password, clicking on links from unknown senders, or giving credentials to an untrustworthy source.
(Proofpoint, 2024)
In 2024, Phishing and social engineering attacks run rampant in our inboxes. These tactics are key enablers of digital identity fraud, but continuous education can keep your employees primed to spot and respond to potential threats responsibly.
