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UK payments players cannot wait for regulation to improve the country’s fraud problems, insiders have agreed.
“The stats certainly show that losses are up, recovery is broadly low at about a third of funds, and this general feeling that it is part of doing business,” said James Richardson, market development head at Bottomline Technologies.
Richardson was speaking alongside other panellists at the launch of Bottomline Technologies annual Payments Barometer.
“There is this feeling that we’re all a little bit beaten.”
Although the government is bringing forth new legislation to tackle fraud, there is a sense of panic among the payments industry about just how to solve the issue, especially considering both the damage to people’s lives, as well as to firms’ reputations.
The Bottomline report found that, across the board, businesses of all sizes in the UK and US have been seriously hit by fraud, with estimated losses up significantly.
This is especially true for small and medium-sized businesses in the UK, where fraud losses have risen by 53 percent and 63 percent respectively, following a decrease in fraud losses the year before.
Meanwhile, in both Great Britain and the US, only around a third of fraud losses are recovered on average, and only 2 percent of small businesses in the UK recovered more than 50 percent of their losses.
The statistics are shocking, agreed Marion King, director of payments at NatWest Group.
“I can’t help but feel as an industry, shame on us,” she admitted. “This is still out of control and getting worse.”
Push payments are ruining people’s lives, she pointed out. “Unfortunately what we saw through the pandemic is that they pick on the vulnerable. They are an easier target. This goes against what all of us stand for and what we believe in.
“It is the weakest link in the chain that they go for, be it a person, be it a business, be it an association of some description.”
Yet, what is pleasing is that organisations are keen to take responsibility, she said. “Companies want to do more and in effect, improve their position on understanding and managing fraud.”
Businesses are right to be concerned that they are being targeted, Richardson continued; however, there are things that organisations can do, whether a small business or at enterprise level.
“There is technology, there is education and support programmes, and access to that is probably the best it has ever been. Credit to the banks for rolling out large waves of education programmes to their corporate customers and credit to the fintechs as well.
“I don’t feel like this should be the answer, that it is the cost of doing business,” he said. “At what point did that become an ok statistic? That we just accept that we have just to consume the fraud.”
Ultimately, society will look back at COVID-19 as a catalyst for fraud rates, said Richardson.
“COVID has probably been one of the biggest drivers for fraud hitting organisations,” he said. “We talk about the term 'catastrophic loss', where it's not just $10,000 frauds but hundreds of thousands.”
There is a lot that organisations can do if they look for education and support, he reiterated.
