The evolution of financial services
For businesses, adaptation has always been key to survival. And in no industry is embracing change more vital than the financial industry. In our ever-evolving technological era, it’s necessary to remain relevant or risk becoming quickly outdated. History tells us that those who endure are those who adapt; those left standing are those who keep up with change. But how are traditional institutions adapting to digitisation? And what barriers are challenger banks facing with data management and fraud prevention?
Both small and large organisations need to implement new technological innovations to ensure they have a secure tomorrow. Fail to keep up and financial institutions will become easy targets for cybercrime or fraud and hard-earned reputations will be ruined.
Some organisations are reaping the rewards of the protective power of technology. But due to cost implications or restrictive, ancient systems, others fail to benefit from technological innovations.”
Embracing change and maintaining trust
Attracting and maintaining customers is all about trust. Your customers need to feel secure. If your customers lose faith in you, they will quickly go elsewhere. A recent study by FireEye revealed that a whopping 75% of 1,000 UK respondents would lose all trust in an organisation – and would no longer use their services – in the event of a cyberattack. So safeguarding against threats of this kind has never been more important for your organisation. It has never been more vital to utilise technological innovations to help to improve your ability to detect and prevent fraud.
75% of 1,000 UK respondents would lose all trust in an organisation – and would no longer use their services – in the event of a cyberattack.
Historically, customers have been hesitant to switch banks. But this would appear to be changing. Perhaps the reluctance to change is the mindset of an older generation. Our digital natives, and the vast majority of our fully converted digital migrants, would certainly have less reluctance. An increasingly tech-savvy consumer base demands convenience, real-time solutions and new digital products and services.
But dealing with a paradigm shift of such magnitude, not seen before in hundreds of years of banking, is resulting in many financial institutions being slow to react or struggling to adapt.
The rise of the machine
The financial industry has come a long way from the beginning of its technological revolution back in 1967, when the world’s first ATM was installed in London by Barclays Bank. This revelation of convenience was a game changer. And over the last 50 years, customers have continued to demand even more convenience.
But as banks switch more services to digital to satisfy the demands of its customers, they broaden their exposure to attack. Digital services are what customers demand, but this also makes financial institutions a larger target for cybercrime and fraud.
The digital age has brought with it many benefits, but it has also caused many new concerns for the industry. And none more concerning than the cybercriminal and organised financial crime gangs.
The rise of cyber fraud
With the financial crisis of 2008 still fresh in the memory of many, 10 years on and financial organisations face very different dilemmas. Recent years have seen a surge in online fraud. Financial Fraud Action UK claims that remote banking fraud rose to a staggering £73.8 million last year. And according to PwC’s 2018 Global Economic Crime and Fraud Survey, a whopping 49% of global organisations have experienced economic crime in the past two years. Fraud is fast becoming a growing issue for financial institutions, as tech-savvy criminals increasingly target the payments industry in new and inventive ways.
49% of global organisations have experienced economic crime in the past two years.
From deception and impersonation scams to sophisticated malware and data breach attacks, fraudsters have their sights on one thing: your customers’ personal data. And once they have it, the consequences can be costly. So as cases of economic crime show no signs of slowing, it’s important to realise the impact that fraud can have on your organisation. A cyber fraud attack will not only be massively disruptive and costly, but this type of infiltration will be seriously damaging to your reputation, will negatively impact employee morale and will harm business relations. WannaCry, which shifted cybercrime to the forefront last year, confirmed that no institution is safe from this type of attack.
...fraudsters have their sights on one thing: your customers’ personal data. And once they have it, the consequences can be costly.
Sadly, financial institutions are like magnets to thieves. And it can be hard to keep up with the ever-changing landscape of fraud and financial crime, as criminal methods continually change and become more organised. Our latest statistics show that organised fraud rose to 59.58% during 2017, which is a clear increase on the 57% for the same period the year before.
Criminals constantly find new ways to perpetuate fraudulent activity, so it’s important to update your data insights and your organisation’s ability to detect and prevent fraud fast enough to fight this constant threat. Outdated defences won’t keep you safe. To fight modern-day criminals, you need modern-day weapons. Some organisations are reaping the rewards of the protective power of technology. But due to cost implications or restrictive, ancient systems, others fail to benefit from technological innovations.
Our latest statistics show that organised fraud rose to 59.58% during 2017, which is a clear increase on the 57% for the same period the year before.