Global card fraud is expected to top USD 31.67 billion by 2020, and therefore promoting fraud awareness is critical. Findings from The Nilson Report, published recently, show that global card fraud grew by 20.6 % in 2015, which means 6.97 cents of every USD 100 spent on cards was fraudulent. That number is up from 6.21 cents in 2014.
In 2015, fraud in the US reached 11.76 cents per USD 100. The US alone accounted for USD 8.45 billion of card fraud losses. That is almost 40% of gross card fraud losses worldwide.
Growth in card fraud is not expected to slow anytime soon. In fact, worldwide card fraud is expected to increase with 45 % from 2015. Should the US also follow this expected increase, its card fraud would be in excess of USD 12.25 billion.
Therefore, some recommended defence tactics for FIs (financial institutions) could include: issuing chip cards to reduce risk of counterfeit card fraud, having strong organizational risk culture by educating internal staff and consumers on fraud tactics.
Furthermore, expanding consumer engagement methods also enables FIs to prevent fraud. When consumers have more ways to interact with their FIs, they may be more likely to alert their FIs of suspicious transactions. Offering online banking and fraud alerts via text or email is a great place for FIs to start.
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