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A Phish Tale? Moving from Hype to Reality

Product Type: Market Research Report
Published by: TowerGroup
Published: December 2004
Product Code: R301-1055
Description
The Internet has changed many paradigms, from the way people communicate, obtain, distribute, and share information to the means they use to buy and sell goods and services. For the financial industry, the Internet has also had a profound and everlasting impact. It provides the most efficient, low-cost channel for soliciting new customers, servicing existing customers, and providing a wide range of financial services. Today, over 30% of all securities are traded online; more than 33 million households use online banking, and e-commerce accounts for almost 10% of all credit card purchases. Westpac, a bank with the largest branch network in Australia, boasts that its clients perform more financial transactions with the click of a mouse than are performed in its entire branch network. The future of financial services has arrived, and it is the Internet.

But a cloud hovers over this party. Since the halcyon days of its birth, security concerns have plagued the Internet channel, and now these threats are escalating. An entire new taxonomy has been created to describe the threats and risks: virus, Trojan horse, worm, hacking, and spyware to name just a few. In 2003, a new word was added to the lexicon of Internet security threats: phishing. Virtually unknown a little more than a year ago, the phishing phenomenon has exploded into the consciousness of financial services providers accompanied by alarmist media coverage.

This TowerGroup Research Note clarifies the true scope and impact of these threats. The Note explains the evolution of phishing, its content, the nature of a phishing attack, and its position in the larger context of cybercrime and related fraud. In addition, the Note explores consumer fraud losses due to phishing and its impact on financial services institutions (FSIs) and online financial services.
Table of Contents
TowerGroup Take-Aways




Report Coverage




Defining Phishing and Associated Threats

Going Phishing

How Phishers Catch Phish


Exhibit 1: Process Flow for a Phishing Attack


Phishing's Evolution

New Bait for Phish: Tricks of the Trade


Exhibit 2: The Rapidly Increasing Sophistication of Phishing Attacks


Morphing to Malware Attacks


Exhibit 3: Global Use of Spyware Is Climbing Rapidly (August 2003 to March 2004)




Market Impact

Incidents


Exhibit 4: APWG-Reported Phishing Attacks by Country and Type of Enterprise (January-July 2004)

Exhibit 5: Monthly Phishing Incidents (January 2004 - December 2004)


The Impact on Consumers


Exhibit 6: Overall Direct Fraud Losses Generated by Phishing Attacks Are Low


Consumer Confidence in the Internet

Impact on FSIs




Summary
Ordering and More Information
Price and Delivery Options


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