Italian Banks Report Rising Fraud Losses Driven by Smartphone App Threats - Economy and business

A survey of Italian banking executives reveals that fraud losses are increasing, with over three-quarters of institutions reporting annual damages exceeding $10 million. The study highlights mobile messaging and social media as primary vectors for these attacks.

Smartphone applications have emerged as the increasingly preferred channel for fraud targeting Italian banks, leading to a reported rise in financial losses. This trend was identified in a survey commissioned by BioCatch, a firm specializing in fraud prevention and financial crime, which interviewed 100 heads of anti-fraud, anti-money laundering (AML), and compliance functions at Italian banks.

According to the findings, 68% of respondents indicated an increase in fraud-related losses within their institutions, with 21% characterizing this rise as significant. Furthermore, more than three-quarters of the participants (76%) stated that their organizations record annual fraud losses exceeding $10 million. This figure is 25 percentage points higher than the global average and represents the highest rate among the 17 countries included in the investigation.

Thomas Peacock, Director of Global Fraud Intelligence at BioCatch, noted that a significant majority (78%) of Italian banking executives believe that transfers within the Single Euro Payments Area will increase fraud risk for their institutions. He warned that with PSD3 set to introduce new obligations requiring banks to reimburse fraud victims, any escalation in transfer-related fraud could impact the economic results of these financial entities.

In preparation for these regulatory changes, nearly three-quarters (73%) of respondents confirmed that their institutions are already planning or implementing modifications to internal reimbursement policies. Voluntary reimbursement of fraud victims is also more prevalent among Italian banks compared to other nations; two-thirds of those surveyed reported that their institution already reimburses more than half of the victims.

The survey highlights that fraud in Italy predominantly spreads through mobile devices. The most common channels for these attacks are linked to the mobile ecosystem, with messaging apps cited as a source by 54% of respondents, followed by social media at 48%, and other smartphone applications at 47%.

Sources: ANSA Economia.