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October 9, 2023 - Greg Oprendek

How to Bounce Back from a Major Fraud Attack

Every industry has its “worst-case scenario” event. For fraud prevention teams, that’s falling victim to a major fraud attack. These breaches cause serious operational disruption, wreak reputational damage, and open customers up to financial harm.

While it’s not exciting to think about a financial institution’s (FI’s) biggest fear becoming a reality—those who are not prepared will double the damage with a poor response. So, how do you ensure your FI can bounce back if it happens to you? As we’ll explain in this post, it comes down to carefully planning a process to diagnose the attack, contain it, and learn from it.

First steps—stop the bleeding

In the wake of a major fraud attack, your world can feel like it’s spinning out of control. To help you stay on task and respond fast, prepare a crisis plan that includes the steps below.

1. Mobilize your fraud response team ASAP

Get all internal experts together to help you navigate the storm. This should include:

  • Forensics – These investigators will dive deep into your compromised systems to understand what happened.
  • Legal – They’ll coordinate with investors, law enforcement, regulatory bodies, and other interested parties to ensure you’re covering all your legal bases.
  • Information Security – This team helps determine the scope of the attack and what systems and data have been compromised. They can also act as a central hub for communication between all parties involved.
  • Information Technology – They’ll work to restore damaged data and rebuild compromised systems.
  • Operations – Their role is to manage the restoration of normal business operations once the crisis is over.
  • Human Resources – They’ll assess potential organizational risks and the impact on your staff.
  • Communications – This team will coordinate external communications with the press, customer groups, industry analysts, and others.
  • Investor Relations and Management – Keeping stakeholders informed is crucial.

2. Consult legal counsel

Legal advice is essential at this stage to ensure you’re taking all necessary steps within the bounds of the law. Your legal team is crucial to your response and should be the first non-security team you engage with after a major attack.

3. Develop a communication plan

If this isn’t something your organization already has on hand for a major fraud event, you need to create one immediately. Be prepared for potential customer blowback and prepare messaging centered on open and honest communication. Being truthful is key during a crisis.

Here are some guidelines for a good fraud attack response communication plan:

  • Be clear and factual about the events and your chronology of what happened.
  • Share what’s necessary, including key details.
  • Focus on sharing information that will reduce customer harm and restore reputational impact.
  • Anticipate the questions people will ask and provide clear, plain-language answers on your website to ease concerns and frustration.

4. Notify relevant authorities and document information

Ensure you follow legal requirements and report the incident to the appropriate authorities. Your legal team should be the main point of contact for any legal or regulatory interactions. The Federal Trade Commission (FTC) provides a helpful breach response guide you can reference.

5. Use safe backups to restore regular operation

Bring your operations and IT teams in to restore normal operations using secure backups. IT will need to find the most recent secure backup, and operations will work with them to implement changes and notify customers.

6. Recover as much data as possible

Every piece of data you recover helps in understanding the full scope of the breach.

7. Investigate the attack type thoroughly

Fraudsters use various cyber-attack methods to get what they want. The type of attack used can reveal what information fraudsters were after, and what damage they were able to do while inside your system. Your Information Security and Forensics teams will be best on point for this investigation. Work with them to pinpoint the type of attack used and remember to check if the fraudsters employed multiple methods associated with the attack types you do find.

8. Look for ransomware, data breaches, DDOS attacks, and malware

Be vigilant and check for various signs of compromise. Some attacks that aim to linger in your system and continue to cause damage are ransomware, data breaches, DDOS attacks, and malware.

9. Bring in outside forensic experts if needed

Sometimes, the breach points may be elusive. Don’t hesitate to bring in forensic experts to help you identify and close all potential breach points. Depending on the amount of data compromised, bringing in outside forensics could be a requirement (i.e. if payment card data is affected.)

Don’t just patch the holes—fill them using improved prevention methods

Stopping as much data loss as possible once you find the type of attack and breach points is, of course, priority #1. But as you uncover the different types of attacks hackers used to get into your system, plan to have your information security team follow up on these weak points once the crisis response stage is over.

As you analyze these weak points, test them—along with other potential weak spots—using penetration testing and code audits. Leave no stone unturned. This includes systems linked to yours, like subsidiaries or affiliated companies that hackers could access your network through. You should be investigating these affiliates immediately after the attack as part of forensic research as well.

Secure all digital and physical access points potentially related to the breach. Look at identities potentially related access points as well to ensure you’ve sealed up every gap. Looking for money laundering activity could help reveal where the fraudsters are working from and unveil their network. In Datavisor’s case, our Knowledge Graph assists in doing exactly this.

Give your fraud solution an honest evaluation

Do you contract with a third-party service provider for fraud prevention? If so, work with them closely to find why the attack happened. You should expect your provider to help you develop a plan to head off these attacks in the future before they can happen again.

Depending on your findings, you may want to bring in other outside fraud prevention resources. To give a truly honest evaluation, you should consider if another fraud prevention platform or provider would help you better protect against a fraud attack in the future.

Fraud and cyber attacks are increasing in both sophistication and speed thanks to major advancements in generative AI and the rise of real-time payments. Your fraud platform must be prepared to meet these challenges with a real-time response and capable AI that detects emerging fraud patterns before they turn into full scale attacks.

Shopping for a new fraud solution isn’t an easy process, but bouncing back from a major fraud attack is much more difficult. Trusting a truly next-gen solution from the start, like DataVisor’s award-winning fraud detection and prevention platform, gives you an advantage over fraudsters. DataVisor leverages best-in-class machine learning, a real-time response rate under 200ms, and a holistic approach to give you an all-in-one detection and prevention solution.

Turn the loss into a lesson

In the aftermath of a major fraud attack, one priority should rise above all others — turning this adversity into an opportunity for growth. Instead of placing blame, focus on becoming a learning organization. Start by meticulously documenting every aspect that contributed to the breach – from your platform’s response to your team’s actions to your customers’ experiences. This detailed account serves as the foundation for creating a comprehensive crisis response plan that can be deployed in case of future breaches.

Moreover, take proactive steps to ensure that the same attack doesn’t catch you off guard again. As the saying goes, “Fool me once, shame on you. Fool me twice, shame on me.” This involves a critical evaluation of your fraud prevention model to identify its shortcomings. If, after an honest review, you know it falls short in safeguarding your organization, consider alternative methods to fortify your defenses in the future. We’ve outlined key signs that indicate the need for a new fraud solution and provided guidance on what to look for when shopping around.

To explore the best fraud platform in the industry, don’t hesitate to check out DataVisor, a best-in-class solution trusted by global FIs and fintechs. To see how DataVisor can prevent you from suffering a major fraud attack, schedule a personalized demo with our team.

about Greg Oprendek
Greg is a passionate digital marketer, avid basketball fan, aspiring fraud expert, and Content Marketing Manager at DataVisor.
about Greg Oprendek
Greg is a passionate digital marketer, avid basketball fan, aspiring fraud expert, and Content Marketing Manager at DataVisor.