The analytics software organisation FICO has released a report from its global fraud consulting team. It reveals trends in application fraud, scams and other fraud topics. The report is based on data from consumer surveys, decision-makers research and insight from FICO’s solutions.
The FICO Global Fraud Report 2023 uncovers the balance organisations need for branch vs digital originations as more business is conducted online. It also looks at the impact of increased digital applications on fraud. Andy Procter, principal fraud consultant at FICO looks at consumer research to uncover what customers really think about how identity checking and application fraud prevention is managed in an online world and provides his top tips for success.
Nearly one-third of respondents to a FICO survey said that good fraud protection is their number one consideration when selecting an account provider. This is only just behind the ease of use at 34 per cent.
Where to invest in the fight against fraud
Furthermore, in the report, FICO discusses the findings of a study of 156 global fraud executives. The study uncovered where banks are looking to invest in their fight against fraud. With nearly two-thirds of respondents planning on major or strategic investments in fraud management solutions in the next 18 months, Szymon Morytko, principal consultant at FICO considers the key strategies they should be following.
Sixty-five per cent of business respondents in a FICO survey indicated that their companies plan to increase operational expenditure for fraud management anywhere from five per cent to over 20 per cent.
Alex Boothroyd, principal consultant at FICO, delves into the issues of card fraud in the current economic climate. Card-not-present transactions continue to increase, and the cost-of-living crisis squeezes already stretched finances, leading to new fraud threats. Boothroyd discusses the likely ways in which card fraud will evolve. This is in addition to where fraud fighters need to focus their attention to counter the threat.
The FICO fraud and digital banking survey found that while most people don’t find first-party fraud acceptable, up to 19 per cent think it is normal. A further 23 per cent say it is OK in some circumstances.
Card skimming in the USA
Fraudsters always attack the easiest targets. Sometimes, this means they revert to older fraud types where the focus on protection is no longer front of mind. In the USA, card skimming has made a resurgence; FICO data shows a 10x year-on-year increase over 2022. Pierre Isensee, consultant at FICO, offers card issuers advice on how to take a multi-layered approach to tackle this long-term issue.
Real-time payments are fueling a global proliferation of scams – often manifesting as authorised push payment fraud. Szymon Morytko looks at the results of a survey of 14,000 people in 14 countries to help you understand the impact scams, and the way banks deal with them, has on customers.
Seventy-seven per cent of respondents believe that banks need to have better fraud detection systems in place. Sixty-four per cent say banks should provide more warnings and education in their messaging about known scams when making payments.