A new report, the COVID CRIME INDEX 2021 REPORT, compiled by BAE Systems Applied Intelligence, found that cybercrime has experienced a massive uptick of 74 percent among banks and insurers alike since the COVID-19 pandemic began.
The data, which focused on financial institutions and their customers during the 12 months between March 2020 and March 2021, found that the upheavals caused by the pandemic have highlighted openings and insecurities in financial institutes’ networks, creating opportunities for fraud, risk, and cyberthreats. This has been exacerbated by cuts of 26 percent to IT security, cybercrime, fraud, and risk department budgets at large, and personnel reductions of IT security teams among more than a third of those surveyed.
“We’re noticing a clear collaboration emerging between different groups of criminals across the wider landscape of serious and organised crime,” Adrian Nish, head of cyber at BAE Systems Applied Intelligence, said. “Fraudsters and cybercriminals seek to exploit fear, uncertainty, and change, and the pandemic has offered them new opportunities to probe for weaknesses they can monetise and new ways to disguise their activity.”
Of 902 organizations surveyed, 42 percent of banks and insurers observed that the remote working model now standard in many areas has made them less secure overall. About 44 percent were also concerned that this has created less visibility of such potential security gaps, leading to 37 percent of financial institutions worrying that their customers are now at greater risk of cybercrime or fraud.
Cybercriminals, like viruses themselves, tend to adapt quickly to openings. As Nish put it, they have reacted quickly during the crisis and become more aggressive. In fact, financial institutions reported a 29 percent rise in detected criminal activity since COVID-19 swept the world. An average of $720,000 has been lost by U.S. and UK banks and insurers over that time, with 56 percent of those institutions reporting an uptick in financial losses.
The situation is just as tenuous among consumers: 20 percent have been targeted by scams since last year, with 28 percent targeted by email hoaxes and 22 percent by text or SMS attempts. On average, cybercriminals are making off with more than $1,100, even after refunds, and for those with no recourse, losses have, on average, hovered around $743. Spikes in online shopping have increased vulnerabilities and led to 84 percent of customers with concerns over data sharing, digital identifies, and personal information online.
It also threatens to erode relationships between financial institutions and their customers since more than 53 percent of surveyed customers pointed to banks to protect them. However, 40 percent declared protection their own responsibility. The majority want more guidance on how to protect themselves from cybercrime.