As the global economy goes digital, economies across Europe are experiencing a rise in fraud.
According to international fraud specialists FICO, Norway continues to suffer greater levels of phishing, smishing and other forms of card-not-present fraud: in January 2022 alone, telecom firm Telia blocked more than 4 million fraudulent calls in Norway – twice as many as in neighbouring Denmark and Sweden1.
Within card-not-present fraud, so-called Synthetic ID fraud – in which criminals combine stolen card and identity details to access customer accounts – has now surpassed credit card fraud as the largest form of fraud in the UK2. Authorized Push Payment (APP) fraud, in which emails sent to consumers ask for the approval of instant payments from their accounts to fake companies, ranks first among new online fraud types in the UK, and is predicted to cost banks more than $5.25 billion next year in the UK and US3.
While financial crime prevention solutions such as Tietoevry Banking’s Fraud Suite are highly effective, preventing more than 90% of fraud attempts, fraud still hits consumers, causing both emotional distress, financial loss and service interruption. Read more about our monitoring services here. However, a raft of recent evidence suggests that banks providing effective support to fraud-affected customers can enhance customer loyalty to their brand while growing revenues and profitability.
“There’s a clear need to assist a bank's customers when they have experienced fraud and feel helpless”, says Rolf-Inge Rasmussen, Product Manager at Tietoevry Banking. “To help banks and their customers, we’ve launched Financial Security Support, a service which helps customers at Tietoevry Banking client banks. Customers affected by fraud can call our specialists to get immediate help that minimizes the financial damage they suffer after fraud.”
More fraud in the face of growing competition
Alongside rising fraud, European retail banks have experienced stiff competition from digital-only players such as Revolut, Starling and N26 in recent years, not to mention tech giants like Apple, Amazon and Google muscling in on traditional banking strongholds such as payments and credit cards.
This makes it more important than ever for banks to retain their status as the “top of wallet” choice for consumers as a range of alternative options to traditional retail banking emerges. That’s especially true when it comes to online shopping, with younger consumers increasingly choosing tech wallets such as Apple Pay4 over credit and debit cards from their bank.
At the same time, rising fraud risk has led many consumers to mistrust online shopping – with a knock-on effect on revenue for banks as consumers choose non-bank payment methods. In Sweden, for instance, 59% of consumers said they experienced an online fraud attempt in 2022, while more than one in three consumers said they were concerned about being hit by online fraud5. With consumers from the Nordics and the UK being among the most digital-savvy and biggest online spenders anywhere in the world6, any loss of confidence in online banking and payments could be catastrophic for the banks involved as consumer switch to alternative payment methods.
The good news: great support builds loyalty, saves time and money
The right kind of support can save banks time and money. That’s because the kind of rapid, specialist support delivered by Tietoevry Banking’s Bank & Card Support 24/7 is able to block access to online and mobile banking, bank accounts and digital IDs, preventing further fraud events and reassuring customers when fraud happens.
Trained specialist support staff can also work with wider teams in banks to follow transaction trails and stop money being transferred to so-called “mule” accounts run by criminal organizations. In the fast-emerging era of instant payment and settlement, such support services can save banks millions. In Norway alone, banks using our Financial Security Support services report saving millions of Kroner every year.
When it comes to customer loyalty, recent work by McKinsey and Company shows7 that banks able to provide customer support during fraud events are more likely to grow faster and deliver higher revenues than their peers. This may sound obvious, but it’s a rarely appreciated fact, since customer support does not generate new revenue in itself.
In a separate study8, McKinsey demonstrate the correlation between satisfied customers and new revenue growth, noting that banks who provide great customer experience enjoy “stacked wins” of lower costs, higher revenues and more repeat business.
At Tietoevry Banking, our dedicated Bank and Card Support team deliver financial security support 24/7 for banks in the UK and Nordics. This includes swift responses from multi-lingual agents with experience in dealing with customers affected by fraud. Our agents provide fast access to online and mobile account blocking, blocking of digital IDs affected by fraud, and support while fraud is traced and resolved by their bank. As the economy digitizes and fraud risk rockets, making sure you have the right customer support in place around the clock, all year long, is fundamental to ensuring the future of your business.
To find out more about Tietoevry Banking’s dedicated, multi-lingual fraud support services, get in touch with us today.
1FICO, European Fraud Monitor 2023-2024: Norway – https://www.fico.com/europeanfraud/Norway
2Thomson Reuters, 21 April 2023, “Trends in Synthetic ID fraud”: https://legal.thomsonreuters.com/en/insights/articles/trends-in-synthetic-identity-fraud
3Fintech Global, 10 August 2023: “Is APP fraud the biggest threat to fintechs?”: https://fintech.global/2023/08/10/is-authorised-push-payment-fraud-the-biggest-threat-to-fintechs/
4NFC World, 6 January 2023: “More than half of consumers feel digital wallets are making physical payments irrelevant” : https://www.nfcw.com/2023/01/06/381253/half-of-uk-consumers-think-digital-payments-are-making-physical-wallets-irrelevant/
5Swedish Crime Agency, The National Crime Survey: https://bra.se/bra-in-english/home/crime-and-statistics/swedish-crime-survey.html
6Payments Cards & Mobile, “European Payment Yearbooks 2023-24”: www.paymentyearbooks.com
7See Forbes magazine, “How to prove the ROI of customer experience”: https://www.forbes.com/sites/blakemorgan/2020/09/07/how-to-prove-the-roi-of-customer-experience/?sh=73a4a26367f4
8McKinsey & Company, 2 May 2023: “Five ways to drive experience-led growth in banking”: https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/five-ways-to-drive-experience-led-growth-in-banking