Social media micro-scams emerge as key challenge for UAE banks, says report
Social media micro-scams represent a growing pain point for UAE banks, particularly in cases involving expatriate customers without long local banking histories, according to a BioCatch-commissioned survey.
The study found that banks in the UAE overwhelmingly (95 per cent) reported social media “micro-scams” as a growing detection and reporting challenge. Micro-scams typically involve malicious actors deceiving victims for smaller amounts, instead of a large-scale scam operation, thus making it feel less risky and more susceptible to victims falling for it.
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“While banks here in the UAE appear ahead of their counterparts in most other countries when it comes to investing in advanced authentication, machine learning, and behavioural biometrics, the widespread adoption of real-time payments has created new opportunities for fraudsters,” the Director of Global Fraud Intelligence at BioCatch, Thomas Peacock, said.
Around 62 percent of respondents said that an estimated Dh18.3 million was lost to annual fraud, while 58 per cent reported increasing fraud losses at their organization.
Despite the increasing fraud losses, BioCatch found that UAE banks expressed growing confidence in their fraud defence systems. 83 per cent said their current controls are either effective or very effective, greater than both the regional and global average.
Additionally, 77 per cent said their organisation was actively looking at new vendors or solution enhancements to tackle these challenges.
More than two-fifths, or 41 per cent, of UAE banking leaders said their institutions are able to fully investigate the root cause of fraud within one day, significantly ahead of the global average of 26 per cent.
However, the survey also highlighted that UAE banks are less likely to reimburse customers affected by scams compared to their global peers, with only 26 per cent of respondents saying their organisation reimburses more than half of scam victims.
Behavioural solutions are also gaining traction across the sector. Around 76 per cent of respondents said their bank is either already using behavioural-based technologies or evaluating their adoption to strengthen fraud detection capabilities.
The findings further show that reputational damage remains a primary concern for banks, with three-fourths of respondents ranking it above the direct financial impact of fraud.
