Preventing online fraud

Today’s figures from Financial Fraud Action UK are both good news and bad news for UK banks and consumers.

The fact that card fraud losses have dropped 23 percent recognises the work that the banking industry in the UK has done to introduce tools such as real time monitoring and blocking of transactions, EMV, or authentication products such as CAP devices. I think it is true to say that fraud has moved overseas, to countries that don’t have the comprehensive systems in place yet to prevent fraud, or who haven’t completed their EMV roll out, but as those systems are introduced they will impact fraud levels.

However, on the other side of the coin is the massive increase in online banking losses of 55 percent from last year. This rise is completely unsustainable and must be addressed. With products such as Faster Payments, banks do not have the luxury of time in their fraud prevention and detection processes. Many are implementing real time prevention, two-factor authentication, SMS alerting or IP profiling to prevent online banking fraud, but these projects must be completed as a matter of priority. Banks know they have got to maintain confidence in their online banking channels so customers don’t stop using them, and they are doing what they can to act quickly before customers are scared off for good.