HK Cybersecurity Woes Continue in 2023

In an era where the convenience of digital transactions has become integral to global commerce, a dark underbelly emerges as fraudsters exploit these platforms. The numbers reveal a concerning trend, particularly in Hong Kong, but there's more to the story than percentages. Delving into the intricacies of these findings, we uncover not only the scale of the problem but also the industries most at risk.

TransUnion has found that digital fraud has seen a significant spike in the first half of 2023, with more than one in 20 global digital transactions suspected of fraud. This rate stands at 5.3%, marking an 18% increase from the same period in 2022. Notably, Hong Kong has emerged as a hotspot for such activities. The suspected digital fraud attempt rate for transactions from the city stood at a staggering 18.3%—the highest among all surveyed markets and regions.

While industries like retail, video gaming, and telecommunications have been the prime global targets, with fraud rates of 10.6%, 7.0%, and 5.3%, respectively, the story is somewhat different in Hong Kong. Here, the travel & leisure industry has seen the highest suspected fraud attempt rate at 8.1%. The surge in digital transactions for this industry, a whopping 243% increase from H1 2022 to H1 2023, might offer some explanation.

"It's not enough to look at fraud rates alone when attempting to measure the impact of digital fraud on any one particular industry or another," remarked Jerry Ying, chief product officer at TransUnion Asia Pacific. "There are other factors that need to be taken into consideration. These include the overall size of the industry in question, in addition to whether the aforementioned industry is growing and, if so, how quickly. Only then can one endeavor to develop a more comprehensive perspective on how digital fraud is impacting these industries. In addition, this can help to project where fraudsters may be focusing their efforts moving forward."

A recent survey has also highlighted the vulnerability of Hong Kong's consumers. A worrying 38% reported being targeted by fraud in the past three months. Vishing (fraudulent phone calls), phishing, and smashing (fraudulent texting) emerged as the top three tactics employed by fraudsters, with rates of 34%, 31%, and 29%, respectively.

Ying added, "The increasing acceptance of digital services and prevalence of spam calls has significantly contributed to the growth in fraud loss. As consumers rely more on online platforms, they have higher expectations for businesses to protect them from fraudulent activities and proactively identify suspicious accounts."

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