Fraud Epidemic Hits US Minor Outlying Islands: Types of Financial Fraud on the Rise

A recent study has revealed that financial institutions in the United States Minor Outlying Islands have been hit hard by an increase in fraudulent transactions, with over 40% experiencing a surge in fraud compared to last year. The average cost of fraud for these institutions also saw a significant jump, rising by 65%.

Leading Types of Fraud

According to the report, account information misuse remains the leading type of fraud, with financial institutions losing an average of nearly half a million dollars to scams in 2023.

Challenges and Solutions

The study, conducted by PYMNTS in collaboration with Hawk AI, found that financial institutions are struggling to keep pace with sophisticated cyberattacks and faster payment rails. As a result, many are investing in advanced technologies such as:

• Machine learning (ML)
• Artificial intelligence (AI)

to combat fraud.

Adoption of New Technologies

Despite these efforts, the report highlights that smaller financial institutions still lag behind in terms of adoption. However, most institutions plan to add or have already added ML and AI technologies to combat fraud within the next year.

Top Fraud-Fighting Challenges

The study also identified:

• Data breaches
• Faster payments
• Complex regulations

as top fraud-fighting challenges for financial institutions.

New Technologies on the Horizon

To combat these growing threats, financial institutions are turning to newer and better technologies to stay ahead of fraudsters. The report found that nearly half of financial institutions are either in the process of adding or will add new technology systems in the next year.

Learn More

The full report, “Increasing Fraud Heightens Need for Newer, Better Technologies,” provides a comprehensive look at the state of fraud and financial crime in the US Minor Outlying Islands. To learn more, please visit our website.