Pulling Together to Tackle Fraud and Improve National Cyber Security

It’s National Cyber Security Awareness Month (NCSAM) in the US all October. So, let’s use this opportunity to come together to understand the bigger picture, and what we can all do to fulfil our shared responsibilities.


national cyber security awareness month


Fraud is a global problem and it’s on the rise. It’s a challenge Simility is devoted to solving by designing the tools merchants need to help screen and prevent as many suspect transactions as possible. But it’s a problem intrinsically linked to the broader cyber security crisis facing organizations around the globe. This is where all stakeholders need to come together to understand what they can do. Data breaches can be catastrophic for the breached firm, but also their customers and countless other organizations that end up suffering “downstream” fraud as a result.

The Bigger Picture

Fraud can come from many places. But one of the biggest drivers is a global data breach epidemic flooding the dark web with stolen financial and personally identifiable information (PII). It’s impossible to accurately estimate the true scale of the problem, but in 2017 there were 1,579 breaches reported to the US Identity Theft Resource Center, a 45% increase on the previous year. As per the same report, breaches shows no signs of slowing down: as of August 31 this year, there had been 864 breaches exposing over 34 million records.

There is, of course, a major financial and reputational impact of these incidents on the breached firms. IBM estimates the cost per breach at $3.9m, although it can go much higher. Where does this breached data end up? Unless it has been stolen by nation states, it will usually turn up for sale on dark web trading sites. One report estimates that this data trading alone contributes around $160bn annually to the cybercrime economy. From there, it can be bought and used in identity fraud. Javelin Strategy & Research claims that 16.7 million US consumers were defrauded last year, an 8% increase from 2016.

This may come in the form of payment fraud, but increasingly the bad guys will use stolen data to open new online accounts in the victim’s name, or hijack existing ones. This can be a better tactic for the scammer as typically they can monetize such attacks for longer before they are spotted than if they use stolen card details which can be more easily blocked. That’s why as per Javelin’s 2018 Identity Fraud Study, account takeover fraud tripled in 2017 to reach a four-year high, with losses topping $5 billion.

The bottom line is that breaches fuel fraud. It might not be the breached company that ends up being defrauded, but somewhere downstream some organization may be, and there’s always an out-of-pocket consumer stuck in the middle.

A Shared Responsibility

This is why the NCSAM’s theme this year is so important. It aims to promote the idea of “our shared responsibility.” This speaks exactly to the problem we’re currently facing in the US and globally with data breaches and knock-on fraud. Organizations must address the challenge from all angles: improving corporate cybersecurity to cut off the source of identity fraud, breached data; and investing in adaptive, AI-powered decisioning platforms to block fraud at a transactional level.

Consumers must also do their bit, by using effective AV tools at home, wising up so they can spot phishing attacks, and using two-factor authentication for online accounts that provide it.

As StaySafeOnline says, the line between off- and online worlds is increasingly blurred today. That means tackling cybersecurity and fraud isn’t just vital for organizations to protect their brand and drive growth, but also to ensure the well-being of our economy and society as a whole.

To learn how Simility, a PayPal service, can help your business proactively curb fraud emerging due to global cybersecurity crisis, contact us for a demo.



Tushar Shah

Tushar Shah

Tushar is VP of Enterprise Services Platforms, and leads Product and Engineering for the Global Risk, Regulatory, and Operational Platforms at PayPal. Tushar focuses on the performance, scalability, and availability to ensure the platforms support PayPal’s growth. A seasoned leader, Tushar leverages technology and business process management to effectively deliver desired business case outcomes.
Tushar Shah