Anything seems possible these days. We can buy whatever we want at the touch of a button, pay with our fingerprints and even talk our devices to make our lives easier. That’s the beauty of technology. But there’s a downside. All these advancements need personal data. And that’s a worry for many of us. Fraud, identity theft and the tidal wave of personalised advertising is a real concern for anyone living in today’s techy world. So what’s being done about it?
The scale of the problem
Before we get to that, it’s important to know the facts. In the first half of 2016, financial fraud increased by a quarter to £399.5 million, all driven by scams and online attacks.1 The industry has lost £1bn to online crime in the last year alone. According to Javeline Strategy & Research, fraud or fraud prevention tools eat up 7.5% of online merchants’ revenue. That’s no small sum for a business especially as online transaction volumes continue to swell, making it harder and harder for merchants to discern between authentic and fraudulent transactions.2
But it’s not all doom and gloom; banks’ security systems prevent the majority of fraud actually taking place. Increased security and investment in fraud-prevention measures and technology have prevented over £679 million worth of fraud in 2016.
And the banks haven’t been left to do this alone. With their support, the government have been keen to help by setting up a taskforce to help police and business crack down on crooks. The Joint Fraud Taskforce, set up last year, collaborates to share intelligence, create a unified response and build greater awareness around fraud risks. This epic team is made up of the City of London Police, the National Crime Agency, Financial Fraud Action, the Bank of England and CEOs of the major banks, all working together to fight fraud.
Great strides have been made from a tech perspective on the fraud front. Chip & PIN, first introduced to the UK by Barclaycard, has reduced high street fraud dramatically since its introduction in 2004. Annual counterfeit card fraud losses alone were down £81.9 million between 2004 and 2014.3 As a payments business, we at Barclaycard focus on heavily on security investment and fraud prevention to ensure our products are robust and that we work hard to keep our buyers and sellers secure.
Innovative technology has helped us prevent fraud. One invention (not explained in detail here to avoid giving the fraudsters a useful tip) allows us to spot known fraudsters over the phone to help protect accounts and compile intelligence. We also work closely with our business customers. If a merchant is suspicious about a customer, they can call us. We’ll then contact that customer immediately to see if the merchant’s suspicions were correct. If so, we can help arrange a police arrest with the merchant’s help.
To the victor go the spoils?
So where’s it all going? The idea of all this technical innovation is to get to a point where breaching the financial industry’s security measures becomes a feat that only the most advanced fraudsters have a hope of achieving. Until then, every anti-fraud innovation makes life more difficult for the criminals, and so our best weapons in the fight to keep our money safe are investment and creativity.