New Zealand Model Unites Cyber and Fraud Teams to Combat Rising Scams
In the landscape of financial security, experts have recently raised alarms over the escalation of online fraud. This surge mirrors techniques typically employed by seasoned cybercriminals. A notable case arises from a recent FBI report that highlights a drastic increase in cryptocurrency scams, leading to staggering losses of approximately $9.3 billion within the past year alone. Additionally, Google has alerted its vast user base—around 3 billion Gmail users—about a sophisticated phishing attack that exploits vulnerabilities in its infrastructure.
In light of these developments, East and Southeast Asia have emerged as significant hubs for cybercriminal activities. The United Nations has issued warnings about the global expansion of these scam operations, attributing this growth partially to heightened law enforcement crackdowns. In response, the financial institutions in New Zealand are implementing a robust suite of measures, carefully aligned with global best practices, aimed at safeguarding New Zealanders from these criminal undertakings.
To bolster the efforts of financial institutions against such crimes, the Financial Services Information Sharing and Analysis Center (FS-ISAC) has introduced the Cyberfraud Prevention Framework. This innovative initiative is specifically designed to integrate cybersecurity and fraud prevention teams, providing them with a unified strategy for safeguarding customers and enhancing enterprise security.
A pivotal aspect of the Cyberfraud Prevention Framework is the establishment of a standardized structure and lexicon. This development allows cyber and fraud teams to more effectively identify gaps in their knowledge and synchronize their response strategies. Linda Betz, the executive vice president of global community engagement at FS-ISAC, noted the traditional disconnect between fraud and cyber teams, who typically engage at different stages of the attack lifecycle. Cyber teams frequently focus on early warning signs, such as phishing attempts and malware infections, while fraud teams generally step in after unauthorized transactions have occurred. The new framework aims to bridge this gap, facilitating a more proactive approach to tackling these threats.
The framework encompasses five distinct phases of a cyber-enabled fraud attack. The initial phase, known as reconnaissance, involves threat actors gathering intelligence and preparing their infrastructure. In the second phase, known as initial access, attackers establish footholds using various means, including phishing, credential stuffing, or exploiting vulnerabilities in third-party systems. The third phase, positioning, sees criminals manipulate account information or establish unauthorized access. This is followed by the execution phase, where initiated unauthorized transactions take place. Finally, the process culminates in the monetization phase, during which stolen funds are moved to mule accounts or laundered.
This initiative is structured to catch and prevent scams at earlier stages—specifically during the reconnaissance or initial access phase—rather than waiting until funds have been transferred. This proactive shift aligns with broader trends, such as the United Kingdom’s newly launched Fraud Intelligence Reciprocal Exchange, which facilitates the sharing of live scam indicators between banks and technology giants.
While larger financial institutions with established fraud and cybersecurity programs may find it more straightforward to operationalize the Cyberfraud Prevention Framework, FS-ISAC asserts that "all organizations, regardless of size, stand to benefit." Betz mentioned that smaller banks and fintech companies can leverage the framework as a foundational model to develop cross-functional detection and response capabilities.
However, experts caution that even the most well-constructed frameworks represent only part of the solution. One of the significant hurdles organizations may encounter is cultural. Betz pointed out that historically, encouraging teams with distinct mandates to collaborate has proven challenging. Many stakeholders operate with separate budgets and responsibilities, and alternative working methods can be daunting for them. Often, individuals working in these segments believe they know best and may be reluctant to relinquish responsibilities to another unit—a mindset that can lead to an admission of failure or a perceived threat to their budgets.
Importantly, the Cyberfraud Prevention Framework does not advocate for a complete merging of fraud and cybersecurity departments. Instead, it identifies key stakeholders to form a strategic group that can collaboratively address issues and establish objectives and strategy. This nuanced approach not only promotes collaboration but also fosters a culture of mutual respect and shared responsibility in combating the rising tide of cyber-enabled fraud.
In summary, as online scams continue to evolve in sophistication and scale, the comprehensive approach adopted by New Zealand’s financial institutions illustrates a proactive model aimed at better unifying efforts against cyber threats. By bringing together resources and expertise from both fraud prevention and cybersecurity, the initiative seeks to create a stronger, more resilient financial ecosystem for all New Zealanders.