According to a survey conducted by LexisNexis Risk Solutions on digital trust, banking is the most trusted sector, with 86% of UK consumers deeming banks trustworthy.
However, only 28% of consumers deem government institutions trustworthy. So, how can the government support the national fight against fraud?
What’s more, nearly two-thirds (60%) of UK consumers said they trust banks the most to keep their personal details safe online. In contrast, only 28% deem government institutions trustworthy. Notably, the study found that banks are twice as likely to be trusted with people’s personal details as the police or the government.
While this validates the efforts that the banking sector has committed to boosting its fraud defences, it shows that other sectors, including the public sector, are lagging behind.
How do different generations view banks and government institutions?
Generational differences also create their own challenges. While 70% of respondents aged 55 and above trust the banking industry with their personal data, the same was true for only 43% of Gen Z (those aged between 16 and 24) consumers. Significantly, Gen Z trusted streaming services, such as Netflix, more than they trusted banks.
So much so that 79% admit to sharing their TV streaming service passwords with friends and family. A fairly harmless practice, you might say. But beyond any headache this causes the streaming services themselves, our trusting younger generations could be contributing to fraud.
The UK: The fraud capital of Europe
The European Central Bank recently named the UK the fraud capital of Europe. While fraud has been on the rise for years, the pandemic, along with the cost-of-living crisis, has helped fuel the conditions for fraud to thrive, causing the number of victims of financial crime to increase exponentially.
While the banking sector has rapidly upped its defences, fraudsters have become more sophisticated, instead targeting sectors with weaker security checks as a backdoor into the financial services sector. The latest fraud statistics from UK Finance show that almost 200,000 Authorised Push Payment (APP) scams were reported last year, with net losses up 39%. As a result, APP fraud now represents close to half of all UK fraud, driven in large part by targeted social engineering scams.
The ongoing fight against fraud
It has become one of the hardest fraud attempts to detect and prevent because it’s perpetrated through the genuine customer themselves, using their normal device – so to all intents and purposes, nothing looks suspicious. Streaming services and social media accounts are just two rich sources of basic personal information, such as name, email address and the date of a Direct Debit, that can be used to convince someone they are being legitimately contacted by their bank.
The scale of these attacks has reached an industrial level.
The LexisNexis Risk Solutions Cybercrime Report shows that around 1.6 billion high-velocity bot attacks took place in just the second half of 2021. These bot attacks targeted sectors with less robust controls, including the communications, mobile, and media services (CMM) sector—which saw attack volumes soar by 894%—as well as e-commerce and gaming companies.
1.6 billion high-velocity bot attacks took place in just the second half of 2021
With the scam process starting around five steps back from the financial sector, this is a cross-sector concern that needs government support to help strengthen security through better information and intelligence-sharing frameworks.
The government can play an instrumental role in creating a cross-sector network that allows multiple industries to share fraud intelligence and work in tandem to tackle ballooning fraud cases. Better accountability at the government level could also help drive positive change and deliver more tangible outcomes.
The fight against fraud: Sharing fraud risk indicators
As our own Digital Identity Network attests, cross-institutional intelligence sharing of fraud risk indicators and alerting mechanisms is a powerful anti-fraud practice. It can also be used to provide a better understanding of the threats emanating from the online sector to help the government build more resilient structures and services for the public, thereby helping to build that apparent low confidence in the digital services they provide. Better alignment of legislation and the application of strong customer authentication protocols akin to PSD2 across all sectors that collect and retain customers’ personal information would ensure that we’re starving the fraudsters’ supply of information, wherever they seek it.
No organisation or sector wants the reputational damage of being identified as third-party fraud enablers for failing to safeguard the integrity of their customer’s accounts. To resolve these issues, and increase levels of trust, the UK Government needs to work with all sectors to ensure that effective support is being provided to those at risk of being, or who have become, victims of fraud. To fight a fraud network, we need to be united as a network.
This piece was written and provided by Jason Lane-Sellers, Director of Market Planning at LexisNexis Risk Solutions
