The banking and finance industry has experienced a lot of turmoil and turbulence in the last five years. The financial crisis in Europe has been the cause of drastic changes in financial landscapes, regulations and trends. Along with changes and disparity, increase in fraud and crime seems to unwelcomingly come hand-in-hand. The fraud landscape has changed for the worst, with new volume and attack techniques on the rise. A trend report has been released by the FICO, with data from the Euromonitor International to help identify and outline some of the key issues and trends that are influencing fraudulent activity in Europe.
European Countries With The Greatest Fraud Threat
The report explained that the card industry measures fraud threat levels on what they call ‘basis points.’ A country that reflects a basis point level between five and ten deems higher fraudulent activity. Logically, countries listed over the ten basis point level are considered to be high fraud activity regions. The European countries listed between five and ten are Spain, ranking in at the highest point, followed by Switzerland, Greece, Norway, France, UK and the Netherlands. When looking at these results it is important to consider the country’s card landscape.
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Criminals Seek Out Weak Links And New Channels
Fraud activity across Europe has increased since 2006, and hit a peak in 2008. The level of fraud remained high in 2011, but the good news is that it seems as though the new anti-fraud regulations in the UK seem to be working. In 2006, the UK took responsibility for 45 percent of fraud, which was reduced to 29 percent (a 177 million euro reduction) in 2011. This report indicates that the crime is migrating to other European countries with less enforcement and weaker protection. The report also shows that since the rise of the EMV chip and PIN, more fraudulent activity occurs on Internet channels instead of in shop.
Fraud Mix Evolves As Countries Crack Down
Countries such as the UK who have rolled out security solutions such as chip and PIN, have been experiencing less fraud attack in the last five years. The attacks have migrated to regions where non-EMV ATMs are still in use, specifically in countries such as France and Germany. Germany has experienced a 123 percent increase in fraud activity since 2006. There has been a rising trend of card not present (CNP) attacks, which account for two thirds of fraud in Europe. These attacks are due to a lack of prevention strategies.
The UK has many banking solutions that include customer liability schemes protecting customer’s money in the case of fraud. The banks in the UK propose that if the money is lost, the customer will be refunded and the bank loses. In countries such as Turkey, these customer protection plans do not exist, which would imply a higher sense of protection. Turkish customers are more apt to report fraud immediately in effort to save their funds and dodge liability being placed upon them. This may be a big reason why Turkey was rated as one of the lowest fraud countries in Europe.
To check out more fraud statistic click here for the full report.
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