The link between declining GDP & fraud
The last large UK recession caused by the 2008 banking crash led to an increase in cybercrime. The graphs below show the correlation between the decline in the UK’s GDP and the reported level of cyber fraud.
During the economic downturn of 2008, the amount of reported cyber fraud was higher than in the years following when the UK economy had moved out of recession.
More detailed studies into the possible correlation between recessions and fraud also show a link. For example, Portsmouth University studied three previous UK recessions and whether they led to an increase in fraud offences being committed.
The study found that:
– The 1980 UK recession led to a 5.6% increase in fraud.
– The 1990 UK recession led to a 9.9% increase in fraud.
– The 2008 UK recession led to a 7.3% increase in fraud.
Based on this information, 2tela assess that there is a strong likelihood that cybercrime will increase as the UK enters recession.
In detail, 2tela believe that as cybercrime increases, it will be in the areas that have a lower technical barrier to entry for criminals and will be in the areas of cybercrime that are most profitable.
Therefore, 2tela assess that the recession will lead to an increase in email fraud, also known as business email compromise (BEC).
The below diagram from the FBI explains how criminals conduct BEC:
Increase in email fraud explained
The reasoning behind our assessment for an increase in BEC due to the recession is:
- BEC is the most profitable cyber crime – the FBI reported that businesses lost $2.4 billion to BEC in 2021
- UK is a big target – in 2021 The UK was the second most targeted country by cyber criminals globally (USA was first)
- BEC is performed by criminals on a global scale – it is a persistent threat with many perpetrators operating across multiple borders and legal jurisdictions
- BEC cannot be legislated against – government intervention will have less impact than it has had on ransomware operations (as BEC victims pay out to criminals unwittingly and it is not a conscious choice such as paying a ransom)
- Any criminal with IT skills can conduct BEC – the technical barrier to entry is lower compared to more sophisticated attacks
- English speaking criminals are conducting BEC – UK & Ireland based criminals are committing BEC which means the phishing emails will be written by native speakers and therefore more convincing. For example, so far in 2022 four people have been extradited from the UK to the USA accused of committing BEC attacks
2tela can stop email fraud
2tela provide a range of services to protect businesses from BEC and other types of cyber fraud. Contact us below to find out how we can protect your business and data.
We will publishing a detailed Cyber Intelligence Report where we explain the latest tactics and trends of BEC attackers so you can protect your business ahead of the UK recession and the increase in email fraud.