European card fraud losses hit a record €1.8bn in 2016, with the UK seeing the highest losses at £618m, as criminals took advantage of a boom in CNP-based online and mobile shopping.
The nine percent rise in UK card fraud over 2015, topped the previous peak set in 2008 after the introduction of chip and PIN.
The figures, detailed in an interactive map of European card fraud produced by Fico and Euromonitor, show that card not present (CNP) fraud across European markets has gone from 50% of gross fraud losses in 2008 to 70% in 2016. Ten countries saw an increase in fraud losses, while eight saw a decrease.
In 2015 the UK’s card fraud rise was the highest in Europe, but in 2016 two countries saw higher rises — Poland (+10%) and Sweden (+18%t). The UK’s rise from 2015 to 2016 was just half of that from 2014 to 2015.
France had the highest basis points at 8.9 (ratio of fraud losses to sales) among the 19 European countries, compared to seven basis points for the UK. However, French card spending is half that in UK, making UK losses much greater. Together, the UK and France account for 73% of the total loses among the 19 countries in 2016, followed by Germany, Spain, Russia, Italy and Sweden.
Fico, which has amassed a total of 70 patents in artificial intelligence and machine learning, talks up the benefits of AI in spotting anomalies without putting friction into the transaction.
“It’s no longer just about identifying patterns that are unusual for the customer — we’re also looking at anomalies at the mobile device, IP address and merchant level,” says Scott Zoldi, FICO chief analytics officer. “All of these have ‘behaviors’ just as individuals do.”