Payments Fraud: Good News for the UK – and a Warning – Info Risk Manage

Our new interactive European Fraud Map for 2017 reveals changes in payments fraud across Europe, and there’s a good news for the UK – but a warning signal for other countries.

Based on data from Euromonitor International and UK Finance, the map shows which countries have made significant gains in the fight against card payments fraud in 2017. France and the UK achieved reductions of 6 and 8 percent, respectively, for the biggest reductions in net fraud losses.

“The UK’s results make it the first market to achieve a significant reduction in card not present (CNP) fraud in many years,” said Toby Carlin, a fraud consulting director with FICO. “While this is fantastic news for the UK, it should come as a significant warning to other markets for the impending migration of attack.

“””With over 90% market coverage in the UK, the FICO® Falcon Fraud Platform has been instrumental in achieving this uplift in performance. Much of this was achieved even prior to the 2017 release of CNP enhanced analytical models, which provide a 30% uplift in detection rates for CNP transactions.

This is a significant turning point in the global fight against CNP, with hundreds of millions of euros worth of fraudulent migration imminent. All other markets should be on high alert to receive this migrating attack and ensure that preventative mechanisms are deployed as soon as possible to stop themselves becoming the easiest target for criminals to hit.

As well as fraud migration, we are also seeing an evolution of fraudulent exploitation using cyber-enabled crimes. The total size of the cyber-enabled threats will come to the fore as PSD2 reporting comes into play across Europe, but early indications from the UK show that cyber-enabled digital fraud is set to overtake plastic fraud by 2020.”

How to Fight Back

The rise of Internet and mobile banking has brought with it access to instant payments and decisions, creating a world of opportunity for criminals. Real-time payments are irrevocable once cleared, and the average loss per case is increasing from hundreds to thousands of euros.

“This is why European markets are demanding an innovative prevention mechanism for payments fraud,” Carlin said. “Fraud defence must be real-time, based on a collaboration of prevention effort, and utilise machine learning and artificial intelligence. It must also be channel-agnostic, operate at an enterprise level, incorporate data seamlessly into real-time decisions, and enact automated customer interactions and authentication without the need for human intervention. These are the pillars of our approach to fraud detection and fraud management.”

Explore our interactive map with detailed payments fraud information on 19 European countries at www.fico.com/europeanfraud.