Total Threat Levels
Data provided by Euromonitor International, Consumer Finance 2022 Edition, and UK Finance
The Story in Basis Points
Reviewing fraud threat in basis points shows the level of fraud attack across the European region. In 2021, the level of attack increased across the board from 2020. Interestingly, the top performers in the region in terms of overall fraud performance (the United Kingdom, Denmark and Sweden) have had the smallest increase in terms of overall card fraud threat, with Denmark the only country to see a reduction in threat levels (from 3.3 basis points in 2020 to 2.1 in 2021). Sweden had an increase of 14% and the United Kingdom’s threat level measured in basis points increased by 32% from 2020 to 2021.
Whilst the United Kingdom and France had the highest fraud basis points in both 2020 and 2021, the threat levels in other countries have increased at an alarming rate over the last year. Fraud basis points in Germany, Greece and the Netherlands increased by 522%, 596% and 602% respectively. The Netherlands had the highest increase in losses in terms of relative value (€8M+) in 2021; however, it is commendable that damages were limited to only an 18% increase in light of the 600%+ increase in overall threat.
Overall, the story in basis points is extremely concerning. Whilst the overall performance trend for Europe may be flat, this is testament to the fraud management efforts of the financial institutions across the region, rather than an indication that fraud threat is remaining steady or slowly going away. The basis points tell us that the fraud threat level (the ratio of fraud losses to card sales) doubled in 2021. Payments fraud is also increasing exponentially, which further highlights the need for enterprise fraud management capabilities in addition to a cross-industry approach to prevent losses escalating in 2022.
Fraud basis points is a standard measure of card fraud severity, and can show how a bank or a country compares to others. 1 basis point is equivalent to 1 cent per €100. It works the same in any currency and provides an indicator of the fraud-to-sales ratio.