In a year that presented fraudsters with new opportunities to exploit consumers, UK financial institutions continued to lead the charge to reduce European card fraud. FICO’s European Fraud Map for 2020, based on data from Euromonitor International, shows that the UK achieved the greatest fall in card fraud monetary losses among the 18 countries studied, dropping 7 percent and £46 million year-on-year. However, other nations did not fare as well.
UK Led European Fraud Reduction
While Europe enjoyed a sizable £54M drop in fraud loss for 2020, this was primarily driven by two countries, accounting for a reduction of £78 million between them. The United Kingdom achieved a £46M reduction (7 percent year-on-year); Denmark recorded a €21M decrease (48 percent).
After achieving the largest single reduction of any European country in 2019, the banks of the UK have repeated this, with the best net reductions of the 18 countries in this report for the second year running. In an incredibly challenging year, only five of the 18 countries analysed by FICO achieved a reduction in card fraud.
This success is testament to the tenacity of the UK banks, which have always favoured customer service over fraud prevention and focused on enabling new, secured channels. This has made for one of the most hostile but still lucrative environments for fraud in the report. Resoundingly, the data shows that banks have continued to improve their fraud defences, despite already having the most advanced approach to customer enablement and frictionless journeys.
Hungary also made significant progress. It achieved the third best reduction in fraud loss of the studied countries, reducing fraud levels by €2M (39 percent).
Norway Sees Massive Rise from Phishing Attacks
Unfortunately, fraud losses continued their increases in France (€6M higher than 2019), Poland (€4M higher) and Germany (€3M higher). There was also a major attack in Norway, which led to an increase in fraud losses from around €8 in 2019 to around €22 in 2020, a rise of 172 percent, the largest rise of all the countries studied.
An impressive multi-industry response to tackle this new attack is already showing positive signs of improvement. Much has been done in the region to combat this threat, both by our banking partners and the mobile phone operators, with real success. The worrying sign here is that the fraudsters have found a hybrid attack vector for the historically ‘digital savvy’ market.
The Norway attacks centre around large-scale phishing and smishing efforts, designed to introduce a scam which ultimately ends in fraudulent Card Not Present (CNP) transactions.
Phishing and smishing attacks come almost exclusively from data compromise and result in several point attacks. The ability to identify these events effectively and early enough to prevent the attack takes a collaborative approach. FICO® Falcon® Compromise Manager is designed to flag fraud attacks and data compromise significantly earlier, helping banks better protect customers as well as minimise losses. Central to the solution is the collaboration it enables between the banks to address the challenge.
Whilst it is incredibly positive for so many countries to have made gains through such a challenging period, with Turkey, Spain and the Czech Republic all showing a relatively flat trend through 2020, more needs to be done across the other European states to drive a truly collaborative reduction in all areas.
See all the country results and commentary in FICO’s European Fraud Map for 2020.