Why is card fraud on the rise?
There is not one answer to this question.
The key contributing factors are simple: changes in how consumers bank today due to technological advances, the mass migration to online shopping, the way we interact with each other and record our lives online. These are the key ingredients of an environment which makes fraud all too often easy to commit.
Many banks have invested in robust technology to quickly identify card fraud and protect their costumers whereas others remain on legacy systems that are out of date and not fit for purpose. Typically speaking, it’s the latter group most likely to suffer from fraud losses and consumer attrition rates. Our research indicates that 40% of consumers who experience fraud tend not to use their replacement card. In essence, their confidence has been knocked and they have lost trust in their bank. Furthermore, financial institutions that do not provide good after care for consumers who have experienced card fraud have a one in five chance of seeing that consumer go elsewhere.
During the past 17 years I have worked with banks all over the world, helping them to prevent fraud. I often ask my clients: “Who is the most important person in your bank?” Responses often include the Chief Executive Officer, the Chief Technical Officer, IT department staff and so on. I often remind them that the most important person in the organisation is The CUSTOMER. Without customers financial institution do not have a business. Ultimately, financial institutions who are not looking after their customers including fraud after care, do so at their peril.