With fraud costing the UK £9.3billion a year, identity theft leaping 11 per cent to an all-time high in 2021 and, for the year ending September 2021, overall fraud was up 36 per cent with a 53 per cent spike in remote banking fraud, 45 per cent of UK adults believe the financial services (FS) industry is more vulnerable to fraud than ever before.
This was the primary takeaway from the most recent TMT Analysis whitepaper entitled ‘Tackling mobile identity fraud in Financial Services’, which highlights how Covid-19 accelerated the trend for online shopping and banking, giving fraudsters the perfect opportunity to scam consumers through fake offers of grants and payments.
The mobile identity company is prompting calls for FS businesses to improve customer trust by introducing stronger security measures and supporting customers by raising awareness of the procedures already in place.
Surveying around 2,000 adults in the UK, over half of the respondents admit to being targeted by phone scams in the last six months – 54 per cent have received at least one fake text message.
Therefore, it is perhaps not surprising that almost half believe that FS providers do not have strong enough identification measures in place to protect them and 52 per cent are scared each day of criminals stealing their identity.
The whitepaper suggests that verifying identification via mobiles is a highly effective method to mitigate fraud, given how 46 per cent of people have had the same phone number for over a decade and a third of consumers would rather change bank account than go through the process of changing their mobile phone number.
Almost half of the respondents see identity verification technology as being crucial in the battle against fraud yet is not fully utilised by FS firms.
With phones now being the cornerstone of the average consumer’s life – with 85 per cent market penetration among those aged over 16 in the UK, according to Ofcom – it is clear that mobile security is paramount to tackling fraud, attracting and retaining consumers.
“The report highlights how the financial services ecosystem needs to implement better processes for tackling fraud and raise awareness of the strict controls already in place, to inform customers and help them protect their accounts and identity,” comments TMT Analysis CEO John Wilkinson.
“Customers can take steps to protect themselves, but FS providers also have an important role to play. To stay one step ahead of fraudsters, financial service businesses need to continue upgrading security measures, provide more information on how they are combating fraud, as well as offer more guidance to consumers on how they can protect themselves.
There is a huge opportunity for FS companies if they can improve customer trust. According to the report’s section on cryptocurrencies, the UK’s crypto market is missing out on 13 million new customers due to its perceived lack of security, meaning potential investors continue to shun these assets.
As crypto-crime hits a record high, distrust is a major turnoff for potential crypto investors with 41 per cent of UK consumers believing there is more fraud in the crypto industry than anywhere else in financial services.
Wilkinson continues: “By acknowledging this public concern and understanding that people are worried about the risk of fraud, financial services companies – including cryptocurrency providers – can tap into customer demand for safer services and potentially increase their customer base. There is great opportunity ahead for the industry if we work collaboratively and tackle fraud in the right way.”