Mobile App Fraud Jumped in Q1 as Attackers Pivot from Browsers

One of the most significant developments in online fraud for consumer-facing organizations last quarter was a sharp increase in fraudulent transactions originating from mobile applications instead of mobile browsers.

Though phishing dominated all other types of fraud, as it has for the past several years, a new analysis of cyberattack data by RSA's Fraud and Risk Intelligence team showed a dramatic shift in fraud activity within the mobile channel. Its analysis of global customer data, collected in the first quarter of 2020, showed a doubling in the volume of fraud transactions that originated in a mobile app rather than a mobile browser.

In the fourth quarter of 2019, 72% of fraud activity that RSA tracked involved the mobile channel. Of that number, 59% originated from a mobile browser and 13% from mobile apps. In the first quarter of 2020, mobile app-related fraud soared to 26% while fraud originating from mobile browsers fell by a corresponding 13%. This represents the highest percentage of fraud involving mobile apps in nearly two years and underscores a broader shift away from fraud involving Web browsers on PCs.

With the exception of the second and third quarters of 2019, RSA data showed the overall volume of fraud stemming from mobile channels, both mobile apps and mobile browsers, has been substantially greater than fraud originating from PC-based Web browsers since at least the first quarter of 2017.

"The volume of fraud from mobile devices has been increasing steadily over the past several years, moving over from PC-based traffic," says Daniel Cohen, head of anti-fraud products at RSA. Much of this is related to the increased use of mobile devices for everyday transactions over the past few years. In the first quarter of 2020, however, another factor was at play.

"Recently, with COVID-19 forcing us to do more things online that we once did physically, like grocery shopping, mobile transactions have become more prominent," Cohen says.

RSA's data tracks with that from other security vendors. Last month, Lookout reported an increase of more than 66% in mobile phishing encounters among corporate users in North America, and a nearly 37% increase globally. 

In the first quarter of 2020, RSA counted 50,119 attacks involving phishing, Trojan horse malware, rogue mobile apps, and brand abuse involving social media and online content to mislead users via brand impersonation. More than half of attacks involved phishing and 22% involved brand abuse, the second-highest form of fraud. Rogue mobile apps accounted for 15% of attack types that RSA counted, followed by Trojan malware at 9%.

Once again, Internet users in Canada were by far the most heavily targeted in phishing attacks. Sixty-six percent of phishing attacks that RSA counted were targeted at Canadian users. For two years in a row, and five straight quarters, Canada has been the biggest phishing target, according to RSA.

The United States, an equally consistent — but distant — second-place target, accounted for 7% of phishing attacks in RSA's data last quarter. Other countries with fairly big targets on their backs included Spain, India, and the Netherlands. When it came to countries hosting the highest number of phishing attacks, however, the US topped the list followed by China, Germany, India, and Russia.

Like numerous recent studies have shown, a high percentage of phishing activity in the first quarter of 2020 involved COVID-19 themed messages and lures. "While fraudsters always take advantage of disruptions, COVID-19 is currently the go-to tool for targeting end users," Cohen says. "As we continue through the pandemic, people will need to be extra cautious before they click on links. Otherwise, they're opening up themselves and potentially their businesses to new risks.”

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