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Description

Description

Covered in this report

This report first examines the market environment; specifically the different types of fraud and how these are impacting the market. It focusses on the effects of recent regulation and how providers will respond in the future, before looking at some recent brand and company developments in this area.


Mintel’s exclusive consumer research looks at the types of fraud and security issues people have experienced, and the various channels used to report them. It looks at how seriously people have been affected by the issues they have faced; as well the measures people take to prevent fraud and security issues. Finally, the report looks at what consumers perceive to be the riskiest financial activities, as well as general attitudes towards fraud and security issues.

“Despite improvements across the industry in tackling fraud, the number of incidents continues to rise. Fraudsters are continually finding new ways to target customers, particularly as more people choose to complete financial activities online or on their mobiles. However, providers have an opportunity to use fraud and security issues to stand out in the market, both in the way they respond to issues and how they educate and help consumers protect themselves.”
– Douglas Kitchen, Financial Services Analyst

This report looks at the following areas:

  • Prioritising fraud and security will improve the customer relationship
  • Using fraud and security to create a point of differentiation

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
    • Executive Summary

        • The market
          • Fraud incidents are on the rise
            • Figure 1: Number of fraud and computer misuse incidents, 2017/18-2018/19
          • Total losses from card fraud grow in 2018
            • Figure 2: Value of card fraud losses, 2009-18
          • Mobile banking is increasingly at risk
            • Figure 3: Value of internet, telephone, and mobile unauthorised remote banking fraud vs total number of unauthorised remote banking fraud cases, 2015-18
          • GDPR leads to a dramatic increase in incident reporting
            • Banks disagree on how best to reimburse APP victims…
              • …while ombudsman raises bar on definition of negligence
                • Behavioural biometrics enter the market
                  • The consumer
                    • Just under half have some experience of fraud
                      • Figure 4: Types of fraud experienced, November 2019
                    • The vast majority reported their issue…
                      • Figure 5: Where fraud was reported to, November 2019
                    • …while most do not suffer a financial loss
                      • Figure 6: Proportion who suffered a financial loss, November 2019
                    • Experiencing fraud can have a positive impact on the customer relationship…
                      • Figure 7: Consequences of fraud and security issues, November 2019
                    • …and will lead to victims improving their financial security
                      • Figure 8: Ways of preventing fraud and security issues, by experience of fraud, November 2019
                    • New providers face challenge to overcome security concerns
                      • Figure 9: Financial activities most susceptible to fraud and security issues, November 2019
                    • Most say they prioritise security over speed
                      • Figure 10: Attitudes towards fraud and security, November 2019
                    • What we think
                    • Issues and Insights

                      • Prioritising fraud and security will improve the customer relationship
                        • The facts
                          • The implications
                            • Using fraud and security to create a point of differentiation
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Fraud incidents are on the rise
                                    • Total losses from card fraud grow in 2018
                                      • Mobile banking is increasingly at risk
                                        • GDPR leads to a dramatic increase in incident reporting
                                          • Banks disagree on how best to reimburse APP victims…
                                            • … while ombudsman raises bar on definition of negligence
                                            • Market Environment

                                              • The number of incidents of fraud grows by 15%
                                                • Computer misuse incidents show a fall…
                                                  • …but detection is getting harder
                                                    • Figure 11: Number of fraud and computer misuse incidents, 2017/18-2018/19
                                                    • Figure 12: Proportion of incidents of fraud and computer misuse which were flagged as cyber and non-cyber-crimes, December 2018
                                                  • Remote purchase fraud accounts for 75% of all card fraud losses
                                                    • Figure 13: Value of card fraud losses, 2009-18
                                                  • Total unauthorised remote banking fraud is on the decline…
                                                    • …although mobile banking is becoming more susceptible to fraud
                                                      • Figure 14: Value of internet, telephone, and mobile unauthorised remote banking fraud vs total number of unauthorised remote banking fraud cases, 2015-18
                                                      • Figure 15: Remote mobile banking fraud, gross losses and number of cases, H1 2015-H1 2019
                                                    • Invoice and mandate scams result in the largest losses among APP scams
                                                      • …while investment scams pose the most risk for the individual consumer
                                                          • Figure 16: Value and volume of authorised push payment fraud, 2018
                                                      • Regulatory and Legislative Changes

                                                        • GDPR results in a dramatic increase in cyber incident reports to the FCA…
                                                          • …and personal data breach reports to the ICO
                                                            • PSD2 set to have a wide reaching impact
                                                              • Online card payments
                                                                • Mobile apps
                                                                  • Temporary APP scam voluntary code launches
                                                                    • Landmark ruling increases the threshold of consumer negligence
                                                                    • Companies and Brands – What you Need to Know

                                                                      • Behavioural biometrics enter the market
                                                                        • Banks take alternative approaches to tackling APP fraud
                                                                        • Brand and Company Developments

                                                                          • The rise in behavioural biometrics
                                                                            • Voice and speech recognition services become more common
                                                                              • Banks take differing approaches to tackling APP fraud
                                                                                • TSB pledges to refund all customers
                                                                                  • Santander attempts to raise awareness
                                                                                    • ‘Confirmation of Payee’ rollout is expected in March 2020
                                                                                      • New solutions can prevent ‘smishing’
                                                                                        • Experian is helping customers identify and prevent fraud
                                                                                        • The Consumer – What You Need to Know

                                                                                          • Just under half have some experience of fraud
                                                                                            • The vast majority reported their issue…
                                                                                              • …while most do not suffer a financial loss
                                                                                                • Experiencing fraud can have a positive impact on the customer relationship…
                                                                                                  • …and will lead to victims improving their financial security
                                                                                                    • New providers face challenges in overcoming security concerns
                                                                                                      • Most prioritise security over speed
                                                                                                      • Experience of Fraud

                                                                                                        • Over 40% have experienced some form of fraud or security issue
                                                                                                          • Millennials are the most at risk
                                                                                                            • Figure 17: Types of fraud experienced, November 2019
                                                                                                          • 20% have experienced more than one issue
                                                                                                            • Figure 18: Repertoire of types of fraud experienced, November 2019
                                                                                                          • Chances of fraud increase with the more financial products owned
                                                                                                            • Figure 19: Types of fraud experienced, by repertoire of financial products held, November 2019
                                                                                                        • Reporting Fraud or a Security Issue

                                                                                                          • 75% say they reported the issue
                                                                                                            • Figure 20: Where fraud was reported to, November 2019
                                                                                                          • Card fraud victims predominantly turn to their provider
                                                                                                            • Investment and payment fraud victims more likely to escalate their case
                                                                                                              • Figure 21: Reporting channel used, by type of fraud experienced, November 2019
                                                                                                          • Financial Loss and Reimbursement

                                                                                                            • Most do not suffer financial loss
                                                                                                              • Figure 22: Proportion who suffered financial loss, November 2019
                                                                                                            • Victims of investment and payment fraud are most at risk
                                                                                                              • Figure 23: Proportion who suffered financial loss, by type of fraud experienced, November 2019
                                                                                                            • Close to 70% are fully reimbursed for financial loss
                                                                                                              • Figure 24: Reimbursement from fraud, November 2019
                                                                                                          • Consequences of Fraud and Security Issues

                                                                                                            • Experiencing fraud can have a positive impact on the customer relationship…
                                                                                                              • …and can prevent issues occurring again in the future
                                                                                                                • Figure 25: Consequences of fraud and security issues, November 2019
                                                                                                              • Suffering a financial loss can have ongoing consequences
                                                                                                                • Figure 26: Agreement with attitudes toward consequences of fraud and security issues, by financial loss suffered, November 2019
                                                                                                              • Victims who have to escalate their case will view their provider more negatively
                                                                                                                • Figure 27: Agreement with attitudes about consequences of fraud and security issues, by reporting channel used, November 2019
                                                                                                            • Preventing Fraud and Security Issues

                                                                                                              • Consumers tend to improve security measure after experiencing fraud
                                                                                                                  • Figure 28: Ways of preventing fraud and security issues, by experience of fraud, November 2019
                                                                                                                • Multi-product holders are more secure
                                                                                                                  • Figure 29: Ways of preventing fraud, by repertoire of financial products held, November 2019
                                                                                                              • Perception of Risk in Different Financial Activities

                                                                                                                • Challengers face a major obstacle in overcoming customer concerns
                                                                                                                  • Millennials are less likely to see mobile banking as risky
                                                                                                                    • Figure 30: Financial activities most susceptible to fraud and security issues, November 2019
                                                                                                                  • Data breach and payment fraud victims have increased concerns
                                                                                                                    • Figure 31: Financial activities most susceptible to fraud and security issues, by type fraud experienced, November 2019
                                                                                                                • Attitudes towards Fraud and Security

                                                                                                                  • Providers expected to shoulder the main responsibility
                                                                                                                    • Security trumps speed for the majority
                                                                                                                      • Figure 32: Attitudes towards fraud and security, November 2019
                                                                                                                    • Greater trust among those who have experienced fraud
                                                                                                                      • Figure 33: Attitudes towards fraud and security, by experience of fraud or security issues, November 2019
                                                                                                                    • Significant overconfidence among younger men
                                                                                                                      • Figure 34: Fraud and security in financial services – CHAID – tree output, December 2019
                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                      • Abbreviations
                                                                                                                        • Consumer research methodology
                                                                                                                          • CHAID analysis methodology
                                                                                                                            • Figure 35: Fraud and security in financial services – CHAID – table output, December 2019

                                                                                                                        This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

                                                                                                                        • Market

                                                                                                                          Mintel provides a range of market information, frequently through the category level, including market size and forecasting, complete with market drivers that illustrate the forces that shape a category or market.

                                                                                                                        • Consumer

                                                                                                                          Mintel's proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

                                                                                                                        • Brand/Company

                                                                                                                          Mintel provides overviews of the top brands and manufacturers, and uses consumer research to explore attitudes and reactions to brands, as well as insight into what will resonate with consumers.

                                                                                                                        • Data

                                                                                                                          Market reports provide appendices of data to support the research and insight produced. Our tables of data are easily manipulated and downloadable to support your research needs and covers factors from consumer attitudes to market forecasts.

                                                                                                                        Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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