anglumea.com - Digital transformation has fundamentally changed the way people access banking and financial services. Transactions that once required significant time and complex processes can now be completed with just a few taps on a smartphone screen. However, behind this convenience lies a growing and increasingly serious threat, known as on device fraud.
On device fraud has become a major concern because it directly targets users’ personal digital devices, such as smartphones and tablets, which are often assumed to be secure by banking systems. When these devices are successfully compromised, cybercriminals can exploit the system’s trust to carry out illegal activities without being detected.
As technology continues to evolve, the methods used by cybercriminals have also become more sophisticated. Attacks are no longer limited to external systems. Instead, attackers increasingly exploit security weaknesses on the user side. This situation has pushed banks and financial institutions to take a more proactive stance and adopt stronger security technologies to protect their customers.
What Is On Device Fraud and How It Works?
On device fraud refers to fraudulent activities carried out directly through the victim’s own device, without the need to take over an account from another device. Attackers take advantage of the fact that devices which have been registered and regularly used by customers are generally trusted by banking systems.
By operating from the same device, criminals can bypass additional verification processes and avoid common risk indicators, such as alerts for new devices or access from unusual locations. Their primary objectives include gaining unauthorized access, stealing sensitive data, or executing illegal transactions.
The methods used vary widely, ranging from social engineering to the abuse of built in device features. Social engineering involves deceiving victims into voluntarily providing critical information, for example through phishing emails, fraudulent SMS messages, or fake websites that closely resemble official services.
In addition, legitimate features such as Accessibility Services on Android devices are often misused. When users grant permissions without fully understanding the risks, attackers can gain extensive control over the device. This includes reading SMS messages, monitoring screen activity, and performing actions on behalf of the user.
Account Takeover Through Device Takeover
One of the most common forms of on device fraud is Account Takeover through a technique known as Device Takeover. In this scenario, attackers deploy malware known as a Remote Access Trojan.
A Remote Access Trojan allows attackers to control the victim’s device remotely, issue commands, and steal data. With this level of access, criminals can read one time passwords and approve illegal transactions without the account holder’s knowledge. Because all activity originates from the legitimate device, security systems often struggle to distinguish these actions from normal user behavior.
Automated Transfer Systems That Are Hard to Detect
Beyond account takeover, there is an even more advanced method known as the Automated Transfer System. Unlike traditional account takeover attacks, Automated Transfer System attacks do not require direct control of the account.
Once the malware is installed, the fraudulent process runs automatically in the background of the device. Users continue to use their devices as usual, while transactions are silently manipulated by the malware. This technique allows attackers to bypass multiple layers of security, including two factor authentication and behavioral analysis systems.
From a scalability perspective, Automated Transfer Systems are particularly dangerous because they can be deployed on a large scale without human intervention. However, developing this type of malware requires significant investment and advanced technical expertise.
A Real World Example: The Copybara Threat
One concrete example of on device fraud is Copybara. This malware is specifically designed to carry out on device fraud, including executing illegal fund transfers directly from the victim’s device.
The group behind Copybara combines smishing, which is fraud conducted via SMS messages, and vishing, which involves fraudulent voice calls, with advanced malware capabilities. The stolen funds are then transferred through organized networks of accounts known as money mules, making the flow of funds difficult to trace.
The rise in on device fraud cases shows that cyber threats no longer come solely from external attacks, but also from legitimate devices owned by customers themselves. This challenge requires banks not only to strengthen their security systems, but also to improve user education.
Without comprehensive preventive measures, on device fraud has the potential to erode public trust in digital banking. A solid understanding of the methods, impacts, and prevention strategies is therefore essential to maintaining the security and sustainability of financial services in the digital era.
Significant Financial Impact
For individual customers, on device fraud can result in unauthorized transactions, identity theft, and depleted account balances. These losses affect not only personal finances, but also daily activities and overall life stability. Recovering stolen funds often takes considerable time and can cause additional stress for victims.
Businesses and financial institutions face equally serious risks. Data breaches or fraudulent transactions can lead to legal obligations, investigation costs, and the need to overhaul security systems. Moreover, reputational damage resulting from security incidents can have long lasting effects on customer trust.
1. Threats to Digital Trust
Beyond financial losses, on device fraud poses a serious threat to public trust in digital services and banking. In an era where online banking, electronic commerce, and digital payments are integral to daily life, security has become the primary factor shaping user confidence.
A single fraud incident can trigger widespread doubt about system safety. On device fraud cases often make users hesitant to engage in digital transactions and even question the reliability of banks and financial service providers. If this trust continues to decline, the adoption of new financial technologies may be significantly slowed.
2. Legal and Regulatory Consequences
The increasing prevalence of on device fraud also brings serious legal and regulatory consequences. Banks and financial service providers carry a substantial responsibility to protect customer data and ensure transaction security. Failure to meet these obligations can result in regulatory sanctions, financial penalties, and legal action.
On device fraud incidents often expose weaknesses in existing security systems and raise questions about the effectiveness of current preventive measures. Strengthening compliance with regulations and security standards is therefore an unavoidable priority.
3. Psychological Impact on Victims
The impact of on device fraud is not limited to material losses. It also has profound psychological effects. Fraud victims often experience a loss of safety, trust, and control over their personal data. Feelings of violation and betrayal can lead to anxiety, stress, and even paranoia.
This psychological trauma can persist for a long time and affect victims’ quality of life, including their relationships with family and their surrounding environment. As a result, handling fraud cases should focus not only on financial recovery, but also on providing emotional support to those affected.
The Importance of Early Prevention
The complexity of on device fraud makes it a major challenge for banks and financial services. This threat spans financial, trust, legal, and psychological dimensions. In response, comprehensive preventive approaches are essential.
User education and awareness play a critical role, as many cyberattacks succeed due to human error or negligence. At the same time, strengthening security systems is equally crucial. Cybercrime has evolved into a highly organized industry that leverages advanced malware and, increasingly, artificial intelligence.
Banks and financial service providers must adopt security solutions capable of detecting emerging threats in real time, including new malware variants and zero day attacks. Through the right combination of education, technology, and risk management, the threat of on device fraud can be reduced while preserving public trust in the digital financial system.
Conclusion
On device fraud represents one of the most serious risks hidden behind the convenience of modern digital banking. By exploiting trusted user devices, cybercriminals can bypass traditional security controls and inflict damage that extends far beyond financial loss.
Understanding how on device fraud works, along with its financial, legal, and psychological impacts, is a critical step for both institutions and users. Effective prevention must begin early, combining user awareness, robust security technologies, and proactive risk management. Only through a comprehensive and forward looking approach can trust in digital banking be preserved and strengthened in an increasingly connected world.
