Data theft now No. 1 type of fraud

The breaching of financial information has officially overtaken theft of physical assets as the No. 1 type of fraud, according to a report released this week by CUNA Mutual Group. The study also found most data theft occurs in the financial services industry. The finance sector is particularly vulnerable given the sheer volume of information that it handles, underscoring the need for firms to employ identity verification and data security standards to mitigate the threat of fraud. "Data breaches have quickly become a top concern," said CUNA senior risk consultant Ken Otsuka. "They are increasing in frequency and severity in terms of number of records breached and recovery costs." Breaches threaten to shake members' confidence in the ability of banks and credit unions to protect their personal information, Otsuka added. What's more, penalties for non-compliance with regulatory measures, whether at the state or federal level, can be severe. Institutions should leverage encryption technologies, loss prevention systems and access management systems to curb the threat of a data breach.