The cost of eroding digital trust in MEA brands and ways to address it | #socialmedia

An AMEinfo exclusive

One-third of Middle East and Africa (MEA) consumers blame banks, retailers, social media companies, and telcos for the current scamdemic, according to new research from Callsign.

Among what the research revealed is that nearly half of MEA consumers don’t trust organizations to keep their data safe, and 49% of scam victims want to know how fraudsters got their details.

In an exclusive interview with AMEinfo, Saeed Ahmad, Managing Director, Middle East, and North Africa, Callsign answered our queries around this subject. We asked:

1- What is the state of scams in the GCC region?

Trust in organizations is eroding fast because consumers are drowning in scam messages from fraudsters spoofing brand names daily. Our research revealed that just receiving a scam message purporting to be from any brand is enough for 49.8% of GCC consumers to lose trust in the organization regardless of any real association with the message.

The problem has become so pervasive that consumers don’t trust the technology and processes designed to protect them from fraudsters and confirm identities. Many are adamant that users must prove who they are when logging in to use a platform and that there should be an online identity system to quell the surge of scams.

a) What channels/sectors are most vulnerable to scams and why?

No industry is immune from fraud or attempted fraud, with financial gain often being the primary driver. It’s no surprise that a significant amount of scam messages purport to be from banks and financial institutions. 

Industries most targeted by fraudsters are financial services and e-commerce, with consumers stating that of all scam messages they receive, claim to represent their bank (63%) or a retailer (36%). 

In terms of the channels most vulnerable to scams, our research showed that MEA customers received scams through email (64%), SMS (67%), phone (44%), messaging apps (45%), and social media (36%) in the last year. SMS appears to be the weakest link, with only 8% of customers believing it is a secure method for communicating with their bank or retailer. The channel has witnessed a 51% drop in customer trust after receiving a fraudulent text message.

Consumers in GCC can receive up to three scams a day, with a quarter receiving more messages from fraudsters than they do from their friends and family!

b) What 3 types of end-users are being targeted more, and why?  

The growth of work-from-home practices made remote workers an easy target for opportunistic fraudsters. According to a recent industry report, 80% of UAE organizations experienced cyber-attacks targeting remote workers.

Bank customers are also another target group as fraudsters often masquerade as banks to extract sensitive information from customers. According to our research, 66% of regional consumers received scam messages from entities posing as their banks. Additionally, as the use of social media increases, scammers have resorted to this channel to target customers, with about a third (36%) of regional customers reporting receiving scam messages on social media applications such as Facebook, Instagram, and Twitter.

2- What are the top recent scams/frauds taking place?  

Fraudsters will use every tactic available. Phishing remains a popular one, with a quarter of regional users reporting that they received scam messages on email once a week. 

Once they gain access to sensitive information, the opportunities for fraudsters are limitless. For example, identity fraud has become increasingly prevalent, with a fifth of consumers affected by identity fraud in 2020. 

Another type of fraud we see increasingly prevalent today is Authorized Push Payments (APP) fraud. Bad actors and fraudsters have switched their focus to customers and attempt to coerce them into making large transfers that seem legitimate from a bank’s perspective and thus hard to detect.

Who should take the blame for consumer scams and why?

Our survey showed that almost one-third of MEA consumers blame banks, retailers, social media companies, and telcos for scam message explosion.  Regional consumers (41%) ask retailers and companies named in the scam to do more to stop scammers, and half of the customers (50%) ask the same of banks. 

Organizations need to re-evaluate the communications channels they use to interact with customers to establish trust better. With fraudsters monopolizing open channels such as SMS and email, these channels cannot be relied upon to authenticate identity. 

4- What is the impact of eroding consumer trust due to frauds/scams on SMEs and Corporates? 

Scams have a massive impact on businesses and, these risks are two-fold: firstly financial, and secondly the cost to an organization’s reputation and therefore loss of trust.

About half (49.8%) of consumers in the region lose trust in an organization whose name is used in a scam message regardless of any real association. Furthermore, almost one-fifth of consumers in the region who have been scammed stopped doing business with the company named in the scam. 

Customer loyalty has never been more delicate than it is now and can be undone by a single scam message.

5- Can SMEs, low on budget, fight against the onslaught of cyberattacks? 

The last few months have shown that organizations of all sizes and kinds are vulnerable to cyberattacks, including scams and fraud. SMEs are no exception as these companies grapple with security challenges, fraud prevention, and maintaining customer loyalty in a competitive landscape. Many of these firms seek protection for their sensitive information and proprietary data. The risks from cyberattacks and social engineering schemes range from financial loss, lost business, and reputational damage. The question for an SME is can they afford not to invest in technology that protects their business and their customers?

6- Which regional corporates/private business sectors you are impressed with their level of security against fraudsters?

Regional financial institutions are making efforts to bolster their digital infrastructures and safeguard their applications against fraud attempts. However, evolving customer expectations and the need to improve service means that security measures can’t come at the cost of user experience (UX). Thus, these institutions should aim to deliver secure and seamless experiences to customers.

7- What is the role of ethical hackers in fighting scam artists?

Scammers are increasingly becoming more sophisticated and are discovering new attack vectors. To fight the rising tide of scams, many sectors have considered employing the services of ethical hackers, or white hats, who can find vulnerabilities within digital systems and proactively defend organizations against these attacks. In this constantly evolving threat landscape, leveraging ethical hackers’ expertise to address security challenges may be a viable strategy. 

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