The UK is losing hundreds of millions a year to financial fraud, and there is no sign of it stopping
Another perfect tech storm has become evident following the sharp increase in levels of financial fraud following reports of the UK losing £2million a day to the problem in 2016.
This haemorrhaging of money is still underway, with the overall scale of financial fraud standing at £768.8 million, showing no positive movement on the 2015 figure of £755 million.
It would appear that the dramatic rise coincides with the constant pace at which society is heading away from the tried and tested, traditional forms of banking, and toward technological replacements that could be fraught with vulnerabilities.
The report was issued by Financial Fraud Action UK (FFA UK) who published these figures coinciding with a national day aimed at raising awareness to the effects of fraud, and how to stay protected.
Steve Arnison, Commercial Director of LexisNexis Risk Solutions has shared his ideas on the crux of the problem.
With the emergence of challenger banks such as Monzo and Starling Bank, people are moving toward mobile only banking options. The momentum behind this changing attitude is evident in the closures of highstreet banks such as HSBC and RBS.
Steve Arnison said: “Technology-savvy Millennials demand accessibility when banking and have contributed to the sharp rise in the online and mobile use we commonly see today, but this preference has been compromised by their growing security concerns. A recent survey by LexisNexis® Risk Solutions found that over half (54%) of Millennials in the UK are concerned about having their identity stolen through online or mobile app-based activities.
“Worryingly, in another survey by LexisNexis Risk Solutions, 83% of ecommerce businesses admitted that they need to conduct more comprehensive identity management to mitigate fraud. With this in mind, banks must prevent online fraud by using identity verification and multi-factor authentication to determine not only whether a customer is who they say they are, but also to establish whether an individual owns the identity. In order to be more efficient, they need to take a risk-based approach with step-up authentication. Going forward, this type of process will play a vital role in maintaining the security of the UK’s online and mobile banking customers.”