As we move forward into the future, it’s evident that the economic challenges in the UK are still very much present. With the economy not anticipated to regain its pre-pandemic strength until at least the middle of 2024, many are facing a prolonged period of difficulty, characterised by a cost of living crisis, higher unemployment rates, and reduced consumer spending.
As people lose their jobs and struggle financially, it provides an unfortunate opportunity for criminals to exploit these vulnerabilities, leading to a rise in digital fraud.
Research from the Office for National Statistics indicates that while most crimes, such as burglary, theft, and knife crime, have decreased since March 2022, digital fraud has continued to rise.
Digital fraud involves threat actors attempting to steal personal information or money from individuals and businesses online. It can manifest in various ways, including:
During tough economic times, people are more likely to fall for schemes promising easy investments, bargains, or job opportunities as they try to improve their situations.
Additionally, financial desperation can drive some individuals to engage in criminal activities themselves. Both these scenarios contribute to the growing problem of digital fraud.
Organisations are also at significant risk of digital fraud during economic downturns.
Companies under financial strain and operating with reduced staff are easier targets for cybercriminals, who may attack individual employees for information or directly target business servers to hold data ransom.
Beyond cyber threats, businesses must also consider their customer satisfaction and retention.
With recent widespread staff reductions at companies like Spotify, Amazon, and Meta, many organisations are forced to cut their workforce to reduce costs.
This often includes trimming down call centres or customer support teams, known for their high operational expenses and large staff numbers.
While cutting staff may save money in the short term, it can lead to numerous negative outcomes for businesses and their customers.
For businesses, this can mean a drop in customer satisfaction and increased operational costs.
For customers, it often results in longer wait times, difficulty in reaching support representatives, and a decline in service quality, which together can harm customer loyalty and reduce business turnover.
To protect against digital fraud during economic challenges, both individuals and businesses should prioritise the protection of their digital assets and personal information.
Employees need to be made aware of online risks, stay vigilant against suspicious emails, and avoid clicking on links or downloading attachments from unknown sources.
Using strong, unique passwords for online accounts and regularly updating them is also crucial for security.
Moreover, businesses should look into adopting technology to enhance cybersecurity and improve operational efficiency, especially when facing reduced staff.
In addressing risks like phishing, malware, and identity theft, introducing secure communication solutions is a valuable step.
By leveraging encryption and authentication capabilities, tools like Mailock are specifically designed to protect internal and external communications, particularly those involving sensitive personal information that could be harmful if obtained by cybercriminals.
Secure email solutions provide a fast and convenient way for customers to reach businesses and are effective tools for call centre staff to send sensitive information and documentation to customers securely, avoiding costly print, pack, and post processes.
As we navigate through economic difficulties, enhancing your cyber capabilities will not only shield you from the increased risks of digital fraud but also offer lasting benefits beyond the current economic climate.
Recession Likely To Be Deeper, But Not Longer Than Previously Expected, EY Newsroom, 2023
Recession And Cost Of Living Crisis Triggers Pandemic Of Fraud, Insurance Times, 2023