Mobile malware, mule accounts driving APAC bank fraud

BioCatch has published its 2024 Digital Banking Fraud Trends white paper on financial crime in the APAC region, and says mobile malware has become a major driver of SMS mining and illegal loan apps. A press release summarizing the report says mules are too-easily able to open mule accounts to temporarily house money stolen via scams.

“Where there are scams, there are mules,” says Tom Peacock, BioCatch’s director of global fraud intelligence. “Criminal organizations use these mule accounts as intermediate stops between the victim’s bank account and the final account from which they plan to withdraw their stolen money.” Financial institutions, he says, must do more to identify mules and stop them from opening new accounts.

BioCatch, which detected more than 150,000 confirmed mule accounts at banks across the region in 2023, uses behavioral biometrics to stop mule accounts, account fraud and social engineering scams, as well as providing customer authentication. Its BioCatch Connect fraud and AML product portfolio can analyze as many as 3,000 different physical behavior patterns to search for anomalies in things like mouse motion, typing speed, and cognitive signals like hesitation. Per its website, BioCatch Connect “puts behavioral biometric intelligence at the center of its artificial intelligence and machine-learning models rather than as a secondary signal.”

Surge in mobile malware fraud for Android

The firm’s 2024 fraud report ranks mobile malware as the biggest threat to banks in Southeast Asia in 2024. “Fraudsters shifting to mobile is a trend we see all over the world,” says the report. “The APAC region is no exception, with a 17 percent increase in mobile fraud seen last year.”

Peacock says there has been an “explosion of Android-based malware” in the region in particular. “Malware developers continue to innovate, circumventing bank and Google Play Store defenses to harvest what they need from mobile devices to access digital banking accounts and then transfer away the victim’s funds to a money mule.”

Australia sees scam losses decline as more cases detected

It need not be like this for APAC nations. The report highlights surprising data from Australia, where the number of reported scam cases grew by 13 percent in 2023 – but scam losses declined by $90 million. BioCatch APAC Vice President Richard Booth notes that “nine out of the 10 largest Australian banks employ BioCatch” behavioral biometrics to fight fraud and financial crime.

Furthermore, he says, “money lost to fraud in the country declined by 48 percent in the first quarter of this year compared to Q1 of 2023. It’s difficult to reach any conclusion other than that BioCatch has left Australian digital-banking customers far safer from fraud than they were before.”

The full report is available for download here.

National Australia Bank looks to BioCatch to battle fraud “scourge”

National Australia Bank (NAB) has deployed BioCatch’s behavioral biometrics for mobile transactions, monitoring metrics such as a user’s keystrokes and the angle at which they tilt their phone. A Bloomberg report notes that, at last week’s Australian Banking Association Conference in Melbourne, NAB CEO Andrew Irvine called financial fraud “the scourge of our times.”

Nor is it going away. Wise banks will keep an eye on the latest biometric authentication and fraud prevention tools, as fraud continues to evolve. BioCatch’s report says “the fraud landscape in Australia is changing, driven by banks detecting more fraud and scams.”

“It’s important for banks to remain vigilant to any changes in modus operandi. It isn’t enough to implement a solution. It requires constant monitoring and adaptation to keep up with ever-innovating fraudsters.”

Majority ownership of BioCatch was recently sold to Permira Growth Opportunities, at a valuation of $1.3 billion.

Article Topics

APAC  |  Australia  |  banking  |  behavioral biometrics  |  BioCatch  |  biometrics  |  fraud prevention