Call for banks to collaborate to prevent customer fraud in light of Which? super complaint
The Payments Systems Regulator (PSR) has announced that banks must do more about the issue of ‘push’ fraud, where victims are tricked into sending instant payments to the wrong recipient. Consumer group Which? – who initiated a super complaint – has suggested that because banks do not have to compensate consumers due to these payments they are not incentivised to prevent it.
But Keiron Dalton of Aspect Software’s digital identity division has suggested that it is completely within the interests of banks and payment service providers to work together to combat increasing fraud as a unit. According to the latest Crime Survey bulletin from the Office of National Statistics released this month, ‘cyber-related’ fraud made up over half (51 per cent) of all 3.8 million fraudulent incidents during the preceding 12 months to March 2016. Of this number, two-thirds (66 per cent) were categorised as ‘bank and credit account’ fraud.
Dalton, who is Director of Innovation and Customer Strategy at Aspect, said: “Fraud is not only growing, but the types and sophistication levels of fraud is sky rocketing. It would be folly for financial institutions not to work together and be more proactive in protecting their customers’ accounts data and relationships as they tackle this growing issue. The advent of mobile banking has given way to push fraud as well as other new types such as SIM Swap and mobile takeover, because fraud will always follow the channels of adoption.”
Dalton continued: “When a bank discovers a mobile fraud threat, it may prevent that fraud coming back and repair the damage but it doesn’t normally share information about the incident with the wider financial community so that it, too, can prepare for and deal with similar incidents. They must also work harder and put in more measures to ensure they are certain of the transacting party’s identity. With mobile banking, this is on their doorsteps in the form of mobile data, behavioural data and so on. The natural course of progression is for the industry to come together and harvest the information available to them in order to build a battlefront.”
He concluded: “On the consumer side, they expect an adequate level of security and identity authentication that doesn’t disrupt their fast-paced, mobile lifestyles. Too much security causes friction and affects the customer experience; too little opens the door to fraudsters. I believe with banks working together we can achieve the right balance in the future.”