Callsign: 2020 Half year fraud report

Today, UK Finance has published their 2020 Half year fraud report, which has revealed that scams are increasing (in the first half of 2020, a total of £207.8 million was lost to authorised push payment fraud), and more customers are being reimbursed for their losses. However, while the authorised push payment scams code that came into force last May is aiding the compensation process, this could ultimately be to the detriment of the user experience, as customers in the UK now have to navigate a barrage of generic and impersonal emails, pop-ups and more, when making online transactions.

Amir Nooriala, Chief Commercial Officer at Callsign and ex CSO and COO from OakNorth believes that, to smooth the user experience and reduce the number of scam victims, banks should turn to improved customer intelligence, behavioural analytics and other passive digital authentication solutions. He comments:

“The voluntary scams code in the UK is a positive initiative that has protected the consumer in terms of liability, but this has happened at the cost of user experience. If we look at a region like Scandinavia, there, the consumer is liable should they fall victim to a scam and the bank doesn’t cover them. As a result, the customer journey has not been affected in the same way as in the UK, with them experiencing fewer hoops to jump through when transacting online. What we need to move towards is the protection the UK offers consumers against scams, combined with the seamless journeys seen in other regions.

“To remediate this problem, banks must prioritise three things. First, improve their intelligence about user behaviour so they can better identify when there is a true risk of a scam. This will help reduce the number of unnecessary pop-ups that consumers have to deal with.

“Second, when banks do have to reach their customers, they should do so using tailored messaging that is personable and justified to that specific customer’s event. By providing more curated and relevant messaging customers will have a more enjoyable user experience which will help build trust and brand loyalty in the long run.

“Lastly, these institutions need to balance security with a frictionless banking experience. This is where passive behavioural authentication is particularly effective. With the EBA recently confirming that behavioural biometrics is appropriate for payment systems in compliance with PSD2, banks must quickly take advantage of this technology and prioritise this inherence authentication factor above others as it is incredibly effective at preventing fraudulent activity, as well as being user-friendly.

“While the voluntary code is an excellent and necessary step in the right direction, the aforementioned approach’s remit travels far further than the various scam prevention initiatives currently in place in other markets as its risk based and inclusive. By following these steps, we should begin to see a reduction in the number of fraud victims, as well as more accurate reimbursement in the future.”