Gen Z, today’s tween, teens and twenties, is starting to show its true potential. The first group of true digital natives would seem to be the least vulnerable to cyber crooks. But surprisingly, research from around the world shows that they are the ones most vulnerable to digital financial fraud.
So what are governments and financial institutions doing to protect them? What more should they do?
Industry body UK Finance Survey of 2,000 UK adults When it comes to fraud, we found that 18-24 year olds are more likely to be targeted by identity fraud than other age groups. 49% of respondents said they had been contacted by an identity fraudster, compared to just 32.5% of people over 55.
More importantly, only 27% of respondents said they always take steps to ensure they can trust organizations or people who suddenly request personal information. Compare this to respondents aged 55 and over. 60% of respondents say they always take steps to check for unexpected requests. Apparently, it pays to be cautious.
global dilemma
Even in Australia, Gen Z is being thwarted by their own self-confidence. 23% of 18-25 year olds An investigation by Compare the Market, a price comparison website, found that people were being scammed out of money by giving up their personal information or using social media and online marketplaces. Australian Gen Z members are twice as likely to have their social media hacked as baby boomers.
on the other hand, Deloitte Connected Consumer Survey shows that Gen Z in the United States is three times more likely to be involved in online fraud and twice as likely to have their social media accounts hacked than baby boomers.
A Deloitte spokesperson explained that one reason these young people are vulnerable is because fraud is actively targeted at them. The “social engineering” techniques used to groom and manipulate Gen Z into sending money or divulging personal and financial details are constantly becoming more sophisticated.
misplaced trust
Gen Z is more susceptible to digital fraud, perhaps in part because they have more online access in their personal, business, and financial lives. Digital banking is the norm for this demographic. You don’t see people going to a branch to complete basic tasks when they have the option to conduct transactions online or via a mobile banking app.
But they also seem to trust technology in situations where it shouldn’t. A digital upbringing has given us a false sense of security, which, combined with a lack of knowledge about finance and money management, can lead us to overlook potential threats and fail to implement cybersecurity best practices.
Many people in this generation manage one’s own finances For the first time, this creates the potential for significant losses.
It also doesn’t help that Gen Z has a higher risk tolerance and is more curious, so they’re more likely to respond to invitations to try new technology. Since they already do almost everything on mobile, they may choose the convenience of using what they already have on hand over safety.
Governments are taking measures
As technology continues to evolve, financial fraud takes on different guises and is carried out across different channels such as email, phone calls, text messages, websites, WhatsApp and other messaging platforms.
One of the UK government’s responses is to change the Online Safety Bill, requiring social media platforms, search engines and messaging platforms to act quickly to prevent and remove fraudulent paid ads displayed within their services. was to impose a legally enforceable obligation to act. .
According to the Australian Competition and Consumer Commission (ACCC), Australians will lose more than $3.1 billion to fraud in 2022, an 80% increase compared to total losses recorded in 2021. . And that’s only the scams reported. It is believed to be the tip of the iceberg.
The Australian Federal Government is establishing a new Anti-Fraud Center which will be part of the ACCC. It pledged to develop a new code of practice outlining clear expectations within the industry, including what banks are obliged to do and what consumers can expect from their banks.
The Australian Security and Investment Commission (ASIC) has also been allocated additional funding to identify and remove phishing websites and other websites that facilitate investment fraud. Additionally, SMS registries have been developed to block fraudulent texts purporting to come from government agencies or businesses.
Bank’s responsibility
All organizations have an important obligation to protect their customers from fraud and scams, but bank customers are by far the primary target of fraudsters. Under new UK law, banks are required to refund money to customers unless they have committed fraud or gross negligence. The sending bank and receiving bank will split the cost of refunding the money to the fraud victim.
Australian and New Zealand law imposes responsibilities on data protection and consumer consent on financial institutions. This includes educating customers about fraud and putting conditions in place to protect them from falling victim to fraud.
Pressure is mounting on big banks in Australia to do more to tackle the issue, but they oppose introducing requirements similar to those in the UK.
In May 2023, the Australian Bankers Association launched a digital Fraud Reporting Exchange (FRX) platform aimed at expediting the reporting of fraudulent payments en route or transferred to another bank. By being able to report fraudulent payments in near real-time, you can stop fraud and increase the likelihood that funds will be frozen and returned to your customers. Early trials show that the time it takes to resolve most fraud cases has been cut by more than half.
Protection built into apps and online banking
When financial institutions choose Sandstone as their technology partner, they can rest assured that our customers’ online safety is our top priority. All Sandstone Technology products have built-in features to protect end users. always innovate We want to make sure our solutions actively help Gen Z and all generations, young and old, keep their personal information safe and avoid financial loss.
All our solutions comply with global security standards as well as regional and industry regulations. We release and deploy security patches within strict SLAs, giving our customers peace of mind that their sensitive data is always safe.
Mobile is now the most targeted device by criminals, so mobile apps must be continually reviewed. Sandstone’s mobile app is highly fraud-proof, with the latest multi-factor authentication (MFA) technology and fraud monitoring integration to keep sensitive customer data safe.
Multi-factor authentication with push notifications allows users to authenticate transactions made via online banking using their registered mobile app instead of using one-time passwords generated via SMS . To further strengthen our security offerings, Sandstone integrates with trusted ID&V providers such as IBM Trusteer, ThreatMetrixs, and RSA.
Biometric authentication, such as fingerprints and facial recognition, adds an extra layer of protection and ensures only authorized users can access their accounts. Other features such as real-time transaction alerts and setting spending limits give customers more control over their accounts. Together, these features can ease security concerns for both financial institutions and customers.
We are also working toward a future that: AI plays a key role in preventing fraud, which has algorithms that help monitor data from vast numbers of transactions to discover patterns of fraud. You can also analyze customer behavior to predict or identify fraudulent purchases in real-time and prevent fraud threats. Machine learning-based fraud detection solutions can be trained to detect fraud within multiple types of transactions and/or applications simultaneously. You can also learn from past data and adjust your rules to stop threats you’ve never seen before.
For more information about the security features of our mobile apps and digital banking solutions, please visit Contact Sandstone Technology.