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New ways of buying, new ways of paying: the advance of information technology is changing everyday transactions. You don't even have to go back very far to see the extent of the changes. It's enough to remember that PIX was only introduced to the public in November 2020 and is now the main means of transferring funds.

In the process of adapting to new technologies, new types of fraud have also emerged. The sophistication and diversity of fraudulent practices present a global challenge and require coordinated action between regulatory bodies, financial institutions and intelligence companies.

In the discussion on updating the regulation of means of payment in Europe, through the so-called Payment Services Directive (PSD3)The fight against fraud has gained prominence. One specific type has caught the attention of the regulator: social engineering, in which victims are manipulated into voluntarily giving what the fraudster asks for.

An important step in the fight against bank fraud was taken with the Joint Resolution No. 06This resolution regulates the sharing of information on signs of fraud between financial institutions regulated by the Central Bank. The Resolution's guiding principle is that cooperation makes the fight against fraud more effective, protecting the financial system as a whole. This type of fraud imposes losses on victims and generates funds to finance other criminal activities, which makes curbing it even more urgent.

In addition to bank fraud, another recurring type involves e-commerce. Over the last few years, there has been a significant increase in online shopping. This change in behavior, motivated by the convenience and greater ease of comparing prices offered by the internet, has led to the emergence of new types of scams, ranging from the creation of fake websites associated with well-known brands to the capture of credit card data to make purchases.

The credit bureau sector has been looking into the phenomenon of fraud through periodic surveys in the search for solutions to protect consumers and companies. According to data compiled by the sector, the rate of attempted fraud in Brazilian e-commerce was estimated at 4.09% in 2023. The result was lower than in 2022, when it reached 5.77%. This drop can be credited to the joint efforts of various sectors to educate the population about suspicious approaches.[AG1]

Beyond our borders, another survey carried out in 18 countries showed that 54% of those interviewed reported having been the target of attempted fraud by email, telephone or text message between September and December 2023. With regard to the most typical frauds, a nationwide survey showed that the recurring ones mentioned by consumers were credit card cloning, online purchases through fake websites, and unauthorized bank transactions.

Faced with the reality of fraud, investment by companies to guarantee the security of online transactions is something that consumers value. A survey conducted by the sector showed that "security" is considered "very important" by 66% of consumers, ahead of "privacy" and even "convenience", which includes what is known as "customer experience". What's more, 62% of consumers were willing to pay more for a brand that offers less chance of being a victim of fraud. On the business side, the survey showed that 68% of the legal entities polled said that their concern about fraud had increased over the last 12 months.

The bureau sector's solutions for combating fraud are varied, with products that cater to consumers and companies. Services include CPF and CNPJ monitoring, with notifications of registration changes and queries, registration verification in line with the KYC (Know Your Costumer) policy, authentication solutions, using facial biometrics, and fraud scores. The technology also makes it possible to assess whether the device used in a transaction has attributes that could be considered risky. This assessment can be made without adding major friction to the customer experience.

The use of technology is an ally in the fight against fraud. The application of artificial intelligence helps to identify patterns related to these operations. Once the pattern has been identified, the company can take action to avoid damaging its business, including its reputation. In fraud where there is less application of technology, where the victim voluntarily transfers resources and data to the fraudster, awareness campaigns play a fundamental role.

The fast pace of life means that consumers demand speedy transfers and payments. This demand is legitimate, but when it comes to financial life, security will require some kind of friction in transactions, but less than in face-to-face transactions. The digitalization of financial life is a path of no return and the combination of cooperation, education and technology can make the adaptation process safer.

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By: Elias Sfeir President of ANBC & Member of the Climate Council of the City of São Paulo & Certified Advisor