‘Antiquated technology’ scuppering fraud threat response at over three quarters of retail banks
Retail banks worldwide are struggling to upgrade their defences against fraud despite the increasing threat of financial crime.
According to data collected for BioCatch, 78 per cent of financial firms worldwide are concerned about their ability to respond to emerging fraud threats quickly and effectively.
The report revealed how lenders feel impelled to boost defences in order to keep up with competitors but often struggle to do so.
While 83 per cent said the market required “best-in-class” approaches to financial crime, a similar proportion, 80 per cent, struggle to provide secure digital experiences to consumers.
The report also highlighted defences to tackle fraud and money-laundering have often been managed by different teams, despite the similarities across the two issues.
Just eight per cent have integrated personnel and tools across the two areas even though three quarters thought integrating the two was “critical” to responding to financial crime quickly.
Chief executive of BioCatch Gadi Mazor said that a big part of the problem for retail banks was outdated technology.
“At a time when consumers are demanding better protections and integrated, frictionless digital experiences, financial institutions’ fraud teams are struggling to meet the challenge due in large part to antiquated technology and overwhelmed resources,” he said.
The report comes amid growing attention to fraud, particularly in the UK. According to figures from UK Finance, over £1.2bn was stolen by scammers last year making the UK the “fraud capital of the world”.
Although banks are investing significant sums into bolstering protections against fraud, many argue that it is impossible to tackle the problem without greater cooperation from others across the chain, such as big tech companies, and beefed up enforcement agencies.
In the government’s recently announced fraud strategy, a new specialist fraud squad was created to clamp down on scammers. However, the government’s strategy has been criticised by some for not going far enough, particularly in forcing big tech firms to reimburse fraud victims.
A range of measures have been put forward to help tackle the problem, such as an anti-fraud tax. Some experts have also suggested that the digital pound, or ‘Britcoin’, could effectively eradicate fraud.