Financial Services, and Travel and Leisure Industries Experience Highest Digital Fraud Attempt Rates from Malawi

As consumers and businesses continue to use digital transactions as a way to engage in commerce, fraudsters are increasingly using them for their own benefit. A new TransUnion (NYSE: TRU) analysis finds that suspected global digital¹ fraud is up in the first half (H1)² of 2023, and while retail and video gaming* were among the most targeted industries worldwide during that timeframe, digital fraud affected all businesses.³ 

Among all industries worldwide, the suspected digital fraud rate stood at 5.3%, up from 4.5% one year ago. Of all digital transactions made by consumers in Malawi, 3.5% were suspected to be fraudulent attempts in H1 2023.³

For transactions originating from Malawi, the financial services and retail sectors saw the highest suspected digital fraud attempt rate in H1 2023 at 8.7% and 7.6% respectively, with telecommunications in third at 6.3%.³

Even though the number of digital transactions in telecommunications in Malawi during H1 2023 declined by 11% from H1 2022, the rate of suspected digital fraud increased by more than six percentage points year-over-year (YoY), signaling clearly that this sector needs to invest in preventive fraud prevention measures. This was also highlighted recently when the Malawi Communications Authority revealed that K120million is lost every month through mobile money fraud, noting that the issue must be addressed collectively and with urgency.⁴

With a 38% growth in transaction volume, the financial services sector saw a 267% YoY increase in the rate of suspected digital fraud attempts made from Malawi, with the rate of suspected digital fraud attempts from Malawi in digital communities (online dating, forums, etc.) having increased by 12% YoY. The rate of suspected fraud attempts declined in the travel and leisure, retail, and gaming (online sports betting, poker etc.) industries.³

The significant increases in suspected digital fraud attempts, along with the increased adoption of digital transactions, indicate that Malawian businesses and consumers should seek meaningful solutions to prevent fraud. This is true even in sectors where attempted fraud rates declined, as threat actors adapt quickly to evolving environments to maximize the results of their attempts.

“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,” said Rodgers Lungu, business development lead for TransUnion Malawi. “There are other factors that need to be considered. These include the overall size of the industry in question, whether that industry is growing and if so, how quickly. Only then is it possible to develop a more comprehensive perspective on just how digital fraud is impacting these industries. In addition, this can help identify where fraudsters may be focusing their efforts in future.”

Financial Services Saw the Greatest YoY Growth in Digital Transactions

and the Highest Suspected Digital Fraud Rate in Malawi

^{Source: TransUnion TruValidateTM data}

^{*Video gaming was not included in Malawi’s reporting as volumes were statistically insignificant}

TransUnion came to its digital fraud findings based on intelligence from its identity and fraud product suite, TransUnion TruValidate which helps secure trust across channels and delivers efficient consumer experiences. The rate or percentage of suspected digital fraud attempts reflect interactions which TransUnion customers either denied in real time due to fraudulent indicators or determined to be fraudulent after a manual review process—compared to all transactions it assessed for fraud.

Download the Omnichannel Fraud in H1 2023 Infographic for more findings including the rate of suspected digital fraud from select countries and regions globally, and the growing problem of synthetic fraud. Specific country and regional data in the analysis include the United States, Brazil, Canada, Chile, Colombia, Dominican Republic, Hong Kong, India, Kenya, Mexico, Namibia, Philippines, Puerto Rico, Rwanda, South Africa, Spain, United Kingdom and Zambia.

Consumers who believe they may be a victim of fraud can find resources and information here.

^{1 Digital fraud involves the use of phishing emails, false websites, phony mobile apps, fake social media profiles, and other mechanisms to illegally obtain information and defraud consumers and businesses.}

^{2 The first half of the year or H1 refers to January 1 to June 30}

^{3 TransUnion TruValidate data}

^{4 Fraud threat to digital payment ecosystems – The Times Group}