With the surge of digital wallets and online payments, an increasing number of people have been targeted by online hacking schemes. Research undertaken by banking technology firm ACI Worldwide has found that almost 20% of all current UK fraud cases are digital wallet hacking schemes.

These hacking schemes are when digital wallet users’ accounts are hacked by outside parties and money is taken from their accounts.

The report indicates that cases of online fraud is not only increasing in the UK, but globally.

13% of France’s population, 11.7% of Italy’s population, and a 41% of India’s population (where there is a boom in digital wallet activity) have fallen victim to online hacking and confidence trickery in the past four years, according to the study.

These findings come on the heels of recent research by UK Finance, which uncovered that the UK population lost £1.3 billion to online fraud in 2021. Last year also saw a 40% rise in authorised push payment scams, which involve users being scammed into authorising large bank transfers through social media or unsolicited calls.

Jackie Barwell, director of fraud product management at ACI Worldwide, states: "As more consumers rely on digital and real-time payments, fraudsters are increasingly targeting the online space to steal sensitive information and top up any missing pieces by impersonating well-known organisations such as banks or government bodies. The advent of open banking and decentralised financial services offers additional room for the problem to grow.”

Given these new threats, banks have a responsibility to protect their customers. Cleber Martins, head of payments intelligence and risk solutions at ACI Worldwide, explains: "Banks need to wake up to the fact that, while they need to use their most advanced technology to monitor outgoing transactions, the same needs to be done for incoming payments to detect mule and fraudulent accounts. We must see increased accountability at the receiving end and enhanced data sharing among all participants in the ecosystem – without breaching privacy regulations. As fraudsters are becoming more advanced, a detailed and holistic view of all payments activity is essential to containing them.”

More banks are taking measures to combat online fraud; recently the Commonwealth Bank of Australia boosted their AI technology to enhance scam protection for their users.

Barwell adds: “A radical rethink of fraud fighting strategies and industry-wide collaboration is required to bring the situation under control. It is an issue that banks cannot solve on their own any longer. Financial service providers, social media giants, telco companies and enforcement agencies all need to work together to stop fraudsters in their tracks before the fraudulent transactions take place. The answer to fighting fraud will not be found by working in isolation."