Total fraud grows while ‘cyber’ fraud accounts for over half of incidents
According to the latest Crime Survey bulletin from the Office of National Statistics released this month, ‘cyber-related’ fraud made up over half (51 per cent) of all 3.8 million fraudulent incidents during the preceding 12 months to March 2016. Of this number, two-thirds (66 per cent) were categorised as ‘bank and credit account’ fraud.
Using new statistics first introduced to the Crime Survey for England and Wales in October 2015, the ONS has been able to estimate real fraud figures for the first time in its history, since total fraud committed is typically difficult to quantify. The ONS reported that total fraud has increased by 5 per cent since the same period in 2014/2015.
Keiron Dalton from customer engagement centre expert Aspect Software claims that a proportion of the overall increase could be attributed to the rise of banking via mobile apps and mobile web. Dalton, who is Director of Innovation and Customer Strategy at Aspect, said: “Both financial institutions and mobile network operators need to work together and be more proactive in protecting their customers’ accounts data and relationships as they tackle this growing issue. In the case of the banking industry this is critical, especially as fraudsters tend to follow the channels of adoption as they are following the money.”
“In the grand scheme of things, mobile security is still relatively fledgling in its maturity, however, BBA reports that banking apps in Britain see 10.5 million logins a day – that’s a lot of opportunities for fraud,” he said.
Dalton continued: “When a bank discovers a mobile fraud threat, it may prevent that fraud coming back and repair the damage but it doesn’t normally share information about the incident with the wider financial community so that it, too, can prepare for and deal with similar incidents. That needs to change. It also seems natural that banks should be working more closely with mobile network operators, given that mobile is quickly becoming the platform of choice for customers. This is a missed opportunity – there needs to be synergy, casting competitiveness aside for the sake of reducing the financial risk that fraud places on their profitability.”
He added: “On the consumer side, I regularly hear that all customers want is an easy, working solution to managing their money on the go; one that is just about secure enough, but also one that doesn’t disrupt their with their fast-paced, mobile lifestyles. Too much security causes friction and affects the customer experience; too little opens the door to fraudsters. Few in the industry have yet stuck the right balance, but it can be done.
Dalton said: “Banks and telcos often have access to sophisticated insight into how people use networks, or record data. By working together, and deploying sophisticated fraud detection and multi-factor authentication technology – such as divert detection and location checks, to ascertain user identity – the customer journey is a lot more akin to the smooth experience that they expect. In this way, banks can also avoid the frustration of false positives, and telcos don’t need to cut off a tariff holder.”
Dalton concluded: “With the ONS releasing these figures, we can truly see the extent of fraud in the UK. Criminals will find the low-hanging fruit, which is currently mobile, and so it is absolutely imperative to focus on securing these channels. I believe the most effective and least costly way to do this is through collaboration.”