6 in 10 APAC banks say fraudulent credit card applications are on the rise – and you should be worried

 Some 44% of banks believe that social platforms and mobile apps are the most likely to suffer a data breach, which can give rise to fraudulent credit card applications.

Your personal information on social media platforms and mobile apps has made it easier for scammers to create fake identities in order to apply for credit cards.

A recent survey has shown that six in 10 banks in the Asia-Pacific region say that they are experiencing such fraudulent applications and a further one in five banks say that such credit card applications now sits between 5% and 10% of all applications.

It’s a worrying thought especially when new identities are created by blending elements from multiple individuals, making it more complicated to spot such fraudulent transactions.

The survey involving 37 executives from financial institutions across the region, was carried out by major analytics software company FICO at its annual Asia Pacific Fraud Forum held in Bangkok, Thailand in October last year.

President of FICO in Asia Pacific Mr Dan McConaghy said in a statement on Feb 7: “As prevention technologies have improved to stop activities such as card skimming, criminals are now stealing identities or constructing ‘fake people’ to get real credit cards.”

The survey found that 44% of banks believe that social platforms and mobile apps are the most likely to suffer a data breach.

He added: “Not only are they stealing data from profile information that is open on the web, they are also breaching poorly defended mobile apps that collect personal information.”

FICO reported that four in 10 banks have this year outlined dealing with credit card application fraud as a key priority.

The survey also revealed that half of all respondents reported an increase of between 25% to 50% in card testing.

Card testing is where criminals test the fraud rules of banks to check what limits and which purchase categories will result in the blocking of a card rather than approval.

A further one-quarter of respondents said it was even higher at between 50% and 100%.

A common new analytic technique used to combat this is by identifying the common point of purchase for compromised credit cards. In doing so, analytics link transactions that were later determined to be fraudulent.

What this means it that by identifying common places where compromised cards were previously used, banks can identify the source of leaked card information.

About half of the banks surveyed currently have such a solution in place.

Among the key obstacles in tackling more fraud, four in 10 banks cited the lack of budget as their biggest problem, followed by their fraud departments having to deal with too many false positives.