This report, sponsored by SAS, explores how the increasingly digital nature of payments changes how fraud occurs and how mitigation efforts need to adapt. This report is based on 120 independent interviews of payment and security executives in 20 countries and analysis of data available from the various markets. Interviews were conducted in December 2019 through August 2020, capturing details pre-coronavirus, fraud occurring during national closures, and after the reopening of economies.  Javelin Strategy & Research maintains complete independence in its data collection, findings, and analysis.

Digital payments around the world are growing as technology becomes more available across developing countries. In an increasingly digital environment, fraud is shifting drastically from counterfeit card capabilities toward harder-to-identify fraud schemes of social engineering, cyber intrusions, and account takeovers.  What has become clear is that although the names of the payment methods may vary, criminals are attacking economies in ways many countries are under-prepared to address.

The coronavirus has not changed how fraud is committed but has shone a bright light on the risks of fraud in a digital age. The move from omnichannels to multichannel, combined with the sophisticated nature of tools that criminals have available to them, provides a road map for financial institutions to build their fraud mitigation strategy over the next several years.  Without technological and operational improvements, the global rise of digital fraud will surpass the losses associated with counterfeiting magnetic stripe payment cards. 

This report provides readers with a clear picture of how digital fraud has changed the operating environment globally. Financial institutions face significant risks, in reputation and from financial losses, if changes are not implemented.  Several recommendations can be deployed quickly to provide immediate relief, while others will be developed over the next several years.  The modifications to the business model not only will improve loss metrics but also will deliver confidence to the consumer and build trust in the brand.