6 significant changes to online fraud we saw in 2021

After a busy year in the cybersecurity and online fraud prevention space, the co-founders of SEON Fraud Prevention weigh in on the top trends that changed fraud in 2021.

They say overall cybercrime is on the rise, with attacks becoming more complex and impactful, and that the situation isn't helped by the fact that many people now work remotely. This new reality has created several additional vulnerabilities within online operations, which they say cybercriminals are only too happy to exploit.

The rise of Ransomware as a Service (RaaS) type business models

"Whether it's Spotify, Netflix, or even SEON, we've all heard about Software as a Service (SaaS) businesses," says SEON co-founder and chief operating officer, Bence Jendruszak.

"It's a great business model, with a ton of advantages for end-users. Sadly, cybercriminals seem to agree and now utilise this method to package already-developed ransomware tools to buyers on the dark web."

He says it's a frightening development, which underlines the increasingly sophisticated nature of many online criminals, as well as the incredible demand for their services.

"It's also greatly reduced the barriers to entry for those looking to commit acts of cybercrime, which significantly increases the risk of these attacks occurring," he adds.

Online fraud got much easier

According to the SEON co-founders, online fraud became much easier in 2021. They say they've been keeping a particularly close eye on virtual SIM cards, which often allow online fraudsters to get around two-factor authentication and one-time password security protocols.

As well as being readily accessible, virtual SIM cards are very cheap. When combined, the technology is helping cybercriminals to commit significant levels of fraud at a nominal price. What's more, it's also rendering many previously effective phone authentication techniques obsolete.

Device fingerprinting became essential but harder

Device fingerprinting techniques gather thousands of data points to detect device IDs, bots and emulators to confirm that users are who they say they are. They can be used to block suspicious logins, prevent account takeovers, and identify multi-accounting attempts. However, SEON says the movement towards privacy and several Apple-led initiatives have made this technique harder to pull off in 2021.

"As we end the year, it's now apparent that businesses need access to modern device fingerprinting solutions to build effective cybersecurity frameworks," says SEON co-founder and CEO Tamas Kadar.

"That's why, at SEON, our solution goes one step further, combining device fingerprinting with real-time data enrichment, IP, email - phone analysis. We're also able to create custom risk scores using detection rules based on machine learning insights."

Online fraud became too expensive to ignore

With a further shift towards online shopping, 2021 was the year that online fraud became too expensive to ignore. The past year has highlighted how effective cybercriminals have become.

"Businesses can no longer afford to economise on cybersecurity and must view it in the same light as traditional, physical security measures, says Kadar. "To ensure this is the case, there's a growing need for flexible, adaptable and scalable cybersecurity solutions, which are accessible to all businesses regardless of sector, or size."

He says the most progressive online businesses now consider cybersecurity an infrastructure cost and part of the gross margin.

"As such, spending in this area can no longer be considered a luxury. What's more, it's often an effective way to help attract new customers in a highly competitive business landscape."

Growing collaboration on fraud prevention

"One of the things I was most pleased about in 2021 was the growth in industry collaboration relating to fraud," says Jendruszak.

"Companies within the fraud prevention space are increasingly coming together to share insights and to develop closer lines of communication regarding new and emerging threats," he says.

"I feel like this is a significant development, especially in the wake of a surge in online fraud attempt rates. It also means that the sector is finally acting more like the fraudsters themselves, who are always sharing tips and tricks to help stay ahead of new security measures."

The unveiling of the Metaverse

Mark Zuckerberg's long-mooted push towards the Metaverse is finally in motion and could soon have major implications on cybersecurity and fraud, which the SEON co-founders believe the sector would be wise to prepare for proactively.

"Most notably," says Kadar. "The new technology raises the question; how do we get people to authenticate themselves in an environment that's increasingly based online? It's an interesting challenge and one that's also pertinent to the problems we face today, particularly with many of us still working from home."