Online and offline fraud remains a very big problem in TradFi. Institutions and service providers cannot develop adequate solutions to thwart criminal activity. Moreover, it seems this activity primarily focuses on the United Kingdom, making it Europe’s fraud capital. Not a good label to have, though.
Fraud Is A Growing Problem
No one will be surprised to learn online and offline payment fraud remains a thriving business. It has been problematic for decades, and things only seem to get worse rather than improve. Especially in the UK, as it is now the region with the most fraud victims and highest losses across Europe. One may argue the UK is also the financial hub of Europe, but combating illicit activity is not a priority, it seems.
New data provided by the European Central Bank’s Statistical Data Warehouse paints a rather grim picture. The data dates back to 2019 and confirms the UK is well ahead of all other European countries in fraud victims and losses. More specifically, the island nation has 134 victims per 1,000 inhabitants – a 13.4% representation – with over $10,000 in losses per 1,000 people. These statistics are very problematic and put the UK over $2,400 ahead for “value of fraud”, although it is not beneficial to be the market leader on that front.
SMF Senior Researcher Richard Hyde comments:
“Britain’s shocking record on card fraud compared to major European economies is yet another reminder of how UK law enforcement has failed to keep up with the epidemic. Policymakers need to reflect further on why we’re at this stage.”
Further statistics confirm bank and card fraud remains the most pressing issue in England and Wales. Those represent over 50% of all recorded frauds between April 2021 and March 2022. Moreover, it confirms things have not improved since 2019, and things may have gotten progressively worse. The entire UK payment system will need to be revamped to address these shortcomings correctly, but that will take time and money.