Exclusive: Surge in fraud and scams sends shivers through the City’s financial services space
Close to half of Londoners believe the financial services industry is more vulnerable to fraud and scams than ever before. And for good reason.
In fact, with fraud costing the UK £9.3bn a year, identity theft leaping 11 per cent to an all-time high in 2021 and, for the year ending September 2021, overall fraud was up 36 per cent with a 53 per cent spike in remote banking fraud.
Findings by mobile ID firm TMT Analysis, shared exclusively with City PM today, the company highlights how Covid-19 accelerated the trend for online shopping and banking, giving fraudsters the perfect opportunity to scam consumers through fake offers of grants and payments.
Surveying over 2,000 adults in the UK, over half of the respondents admit to being targeted by phone scams in last six months – 54 per cent have received at least one fake text message.
Therefore, it is perhaps not surprising that almost half believe that financial services providers do not have strong enough identification measures in place to protect them and over half (52 per cent) are scared each day of criminals stealing their identity.
ID verification
Verifying identification via mobiles is a highly effective method to mitigate fraud, the firm stressed, given almost half of people have had the same phone number for over a decade and a third of consumers would rather change bank account than go through the process of changing their mobile phone number.
Almost half of all Brits see identity verification technology as being crucial in the battle against fraud yet is not fully utilised by financial services firms.
With phones now being the cornerstone of the average consumer’s life – with 85 per cent market penetration among those aged over 16 in the UK, according to Ofcom – it is clear that mobile security is paramount to tackling fraud, attracting and retaining consumers.
“The financial services ecosystem needs to implement better processes for tackling fraud and raise awareness of the strict controls already in place, to inform customers and help them protect their accounts and identity,” according to John Wilkinson, CEO of TMT Analysis.
“By acknowledging this public concern and understanding that people are worried about the risk of fraud, financial services companies – including cryptocurrency providers – can tap into a customer demand for safer services and potentially increase their customer base,” he concluded.