A survey, conducted by Kaspersky Lab and B2B International revealed that in 2014, 52% of financial companies reimburse customer losses caused by Internet fraud without actually investigating the circumstances.
This finding is coupled with another one: It seems that close to a third of those companies believe the damages from cyber threats cost less than protection. As e-payments are increasingly targeted by cybercriminals – this approach could translate into a major expense.
According to Kaspersky, “Many organizations that work with online payments are prepared to accept the additional costs that arise from cyber-attacks. 28% of the representatives from financial companies and 32% of the online store employees polled are sure that the total losses from online crime, including reimbursement of stolen money, do not exceed the costs of deploying security solutions. Only 19% of financial companies and 7% of online marketplaces cite the cost of compensating customer losses in the top three most serious consequences of cyber fraud.”
The experts at Kaspersky also added that “At the same time nearly 4 million users of our products encountered financial malware that attempted to steal their money in 2013 (a rise of 18.6% compared to the figure for 2012). In December 2013, a number of North American banks suffered losses of more than $200 million as a result of customers’ bank card details and personal data being leaked – and the final sum of the damage is likely to be much higher. Obviously, the continued growth in cybercrime will lead to a situation where the compensation paid out by companies will exceed both the cost of protecting financial transactions and their compensation budgets.”
“Besides the need for financial companies to set aside funds in their budgets to reimburse money stolen from customers, they also have to cover the costs of dealing with customer complaints. But most importantly, even if the victims are reimbursed quickly, they are likely to think twice about using the services of a bank that can’t ensure their online accounts are secure. It is better to prevent the loss rather than compensate it. Customized solutions designed to protect online transactions such as the Kaspersky Fraud Prevention platform can reduce the risk of online fraud to a minimum, meaning funds set aside for compensation can be freed up and used for developing the business,” said Ross Hogan, Global Head of Fraud Prevention Division at the company.
Another interesting finding in the survey was the users lack of awareness and his attitude: It appears that 57% of users pay little or no attention to the security of their online payments because they believe all the necessary measures are taken by their bank. This merely increases their chances of falling victim to cybercriminals.