Finance Monthly March 2019 Edition

24 www.finance-monthly.com SPECIAL FEATURE - BANKING he Home Office estimates there is £14.4bn worth of economic crime within the UK’s financial sector each year. And a recent report by the Financial Conduct Authority estimates the financial services industry is spending over £650 million annually in dedicated staff time to combat fraud and other financial crimes. This excludes costs such as IT investments in fraud prevention and detection, so in reality, the number is likely far higher. Achieving the goal of driving down fraud, while ensuring the best user experience and meeting strict compliance regulations, continues to be a major challenge for the industry. On the other hand, technology is often a bank’s first line of defence against fraud. A Juniper Research report on online payment fraud said merchants and FIs will spend £7.2 billion annually on fraud detection and prevention tools by 2022. There are several challenges that come with this. One big part of the problem is that banking environments are becoming harder to defend, and computing environments which are already inherently complex only become more complex with the integration of new technologies. Another problem is solutions overload: there are over a thousand vendors competing to The banking industry has a multi-billion pound fraud problem. Financial institutions (FIs) continue to spend more and more money on fraud tools, with seemingly no end in sight. Every time fraud increases, so does spending. But this, paired with the fact that fraud continues to rise, indicates the approach financial institutions are taking is flawed, says David Vergara, Director of Security Product Marketing at OneSpan. British banking customers lost £500m to fraud in the first half of 2018, and new figures from Action Fraud show that more than £190,000 a day is lost in the UK by victims of cyber-crime. We’re also seeing newer types of fraud gain momentum, such as contactless fraud, which doubled in just 10 months in 2018. SOLVING THE BANKING INDUSTRY’S MULTI-BILLION POUND PROBLEM www.onespan.com T David Vergara Director of Security Product Marketing at OneSpan