May 23 • 2023

UK Finance 2022 Fraud Report and UK Fraud Strategy – Positive signs in the battle against fraud and scams 

Cybercrime is low risk, low investment, and high return. Not surprisingly, illegal financial gain is one of the biggest reasons for cyber-attacks. The result is a predicted USD 10 Trillion of damages by 2025. Our vision is to change that.

Written by Rob Tharle, Head of Product

It often feels like doom and gloom when talking about fraud, but the latest fraud figures from UK Finance show there is some light in the fight against fraud and scams. In this blog, I’ll give an overview of the numbers concentrating on remote payments and APP frauds as well as the recent UK Government fraud strategy. 

Key points  

An overall downward trend, but what’s underneath? 

Let’s dig a little deeper.

There are three main areas of fraud in the UK report, so let’s cover those in turn concentrating on remote banking and authorised fraud and scams.

Card Fraud (Unauthorised) 

Remote Banking Fraud (Unauthorised) 

Clear shifts in channel usage by genuine customers which is then reflected in how the fraudsters attack, but overall a decrease in fraud. 

Prevention has moved further towards source so harder to record and/or attack level has dropped off. This is likely due to covid impacts of lockdown being removed, the 51% prevention rate is still just above pre-pandemic numbers. 

APP Fraud (Authorised) 

As discussed here most cases start online, with banks reporting online as the source in 76% of cases, telcos 18% and email 2%. What is interesting is how this changes for values at 36%, 44% and 12% respectively. 

Therefore, the average value for online cases are lower than via telcos as many of these are lower value purchase scams. Email has the highest average loss per case as value is 6 time the volume. 

What do the numbers tell us that’s interesting? 

This report shows that the attack level is still very high and that the enablers are still there, namely the levels of compromised and continually compromised data and online platforms and telcos. 

What is clear is that by increasing the incentives for financial services players to invest, is resulting in meaningful reductions in both cases and losses, whether regulatory or financial through increase liability. 

However, as ever there is an element of whack a mole here, as the fraud does shift and often to where investments have not been made. It is therefore important for firms to invest where items can make the most difference and where they can be easily leveraged across products, channels and risk types.  

This ties in nicely with the recent UK government’s long awaited fraud strategy

The key points of this are: 

Whilst this fraud strategy is welcome, it probably doesn’t go far enough. Many of the elements are already being progressed or are in place and the level of resources being allocated it actually quite small given the size of the problem. Further, The targeted reduction is quite small, especially in the context of the reductions in some fraud types in the above report. 

Whilst banning things is getting headlines, bans in themselves does not stop them these acts from happening. Having said that these bans could have the following positive effects: 

There is also what many see as watering down of how the platforms are being targeted seems a shame, given the volumes of frauds that originate there, as the numbers above show. Let’s see how to the online safety bill and the Failure to prevent laws will make some difference. 

The support for increased data sharing is very welcome and the strategy reflects a number of the things we do at CYBERA.