Fraud. We know it, we don’t love it, and in fact, we actively fight it. However, evolving data trends suggest that we may need to change the way that we fight it, and, in particular, who we target fighting fraud education towards.
For decades, the largest group that has been the target of fraud scams tended to be the less tech savvy, more vulnerable populations. How many times have you told certain people in your life not to open certain emails or click on specific links? However, according to a report issued by PYMNTS, the target audience for fraud scams is becoming younger and more technologically sophisticated.
Younger generations have a much larger digital footprint. Whether it’s a significant social media presence or engagement, or consistent engagement in the online marketplace, the increase in a digital presence makes younger, but more technologically savvy generations the ideal targets – particularly for Artificial Intelligence (AI)-generated fraud scams.
To that end, AI presents a convenient vehicle for fraudsters and bad actors to execute near-perfect impersonations. Whether it’s voice cloning or text imitations, fraudsters can convince even the most skeptical of individuals to engage with the scam. In fact, according to the report, nearly 8 in 10 fraud scams involve an impersonation, accounting for nearly 81 percent of successful fraud scams.
Additionally, in a study published by Deloitte, individuals who were born between the years 1995 and 2006 (colloquially known as “Gen Z”), were more than twice as likely than individuals born to the “Boomer” generation to report that their social media account had been hacked for the year 2024. While there may be a myriad of reasons for this, the report cites that Gen Z tends to spend more of their time online and has an increased tendency to engage with more apps and share personal information more freely.
To an extent, the digital footprint increase and the more commonplace use of AI leaves younger generations more susceptible to fraud. Additionally, younger generations are more accustomed to technology being commonplace, as the use of AI has become prevalent in the workplace and the classroom. Since younger generations tend to be more acclimated towards the use of technology, the shift towards them being targets of 21st century fraud scams seems more likely.
How can a financial institution reach this younger audience? According to the Deloitte report, younger generations place a higher value on trust, which can be effectuated through transparency. Financial institutions that engage with the younger audience in ways that effectuates trust will be much more likely to be able to educate them about digital fraud scams. Additionally, creating transparency around the online payments process through educational efforts may also prevent a younger audience from participating in a scam.
Have questions or want to know more? Contact ViClarity’s compliance services team at compliancesupport@viclarityus.com.
For more information, email Heather Line.
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