Transcript Card Fraud Conference 2012

Card Fraud Conference 2012
It’s all a matter of trust
Alastair Sheen
Senior Card Fraud Strategy Manager
EuropeRisk
PUBLIC
27 March 2012
Agenda
 Fraud Trends
– Global/Regional/UK
 Trust & Stakeholders
– changes in retail banking
 Current Challenges
– Costs
– New Technologies
2
PUBLIC
20m HSBC cards in the UK
PUBLIC
Card Fraud Trends
Overall downward trend
•Downward trend:
•
Globally
•
Regionally
•Key factors:
•
Global EMV rollout
•
3D Secure
•
Data compromise
Credit Card Fraud Trend (MasterCard)
Credit Card Fraud Trend (Visa)
UK
HSBC
Region
UK
Region
Global
2010 Q3
2010 Q4
2011 Q1
Fraud (bp)
Fraud (bp)
HSBC
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2009 Q4
2011 Q3
2010 Q1
Debit Card Fraud Trend (Visa)
HSBC
UK
2010 Q2
2011 Q2
2011 Q3
UK Card Fraud 1997-2011
Region
CNP
Counterfeit
Lost / Stolen
App & ATO
Mail non-receipt
£600
Fraud (£m)
Fraud (bp)
£500
£400
£300
£200
£100
£0
2009 Q4
2010 Q1
2010 Q2
2010 Q3
2010 Q4
2011 Q1
2011 Q2
2011 Q3
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
UK Cards Association/APACS
4
RESTRICTED
UK Fraud Trends
UK Card Fraud down 7% on 2010 (£365m to £341m)
•UK Card Fraud
•Down 45% in 3 years - £610m peak
•Lowest since 2000 - £317m
•Key factors:
•
3D Secure
•
Fraud awareness
•
Data sharing
•
Detection systems
•
Upgrade to DDA
•
Global EMV rollout
•
POS environment
•Telephone banking fraud up 32%
•
£13m to £17m
•Key factors:
•
Social engineering
•
Weakest link
•Cheque fraud up 17%
•
£29m to £34m
•Key factors:
•
Stolen/altered payee
•
90% detected
•
Security features
CNP
Counterfeit
Lost / Stolen
App & ATO
Mail non-receipt
£600
£500
Fraud (£m)
•Online banking fraud down 24%
•
£47m to £35m
•
Phishing up 80%
•Key factors:
•
Detection systems
•
Tokens
•
Anti-virus/malware
UK Card Fraud 1997-2011
£400
£300
£200
£100
£0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
UK Cards Association/APACS
5
PUBLIC
It’s all a matter of trust
Trust & Stakeholders
PUBLIC
Trust
The way it was…
Banks & Customers
7
PUBLIC
Trust
The way it is now….
Trust
Stakeholders
8
PUBLIC
Customer Trust
Old
or
9
New?
PUBLIC
It’s all a matter of trust
Current Challenges
PUBLIC
Current Challenges
In my World
 Costs
– Income under pressure from many directions
– Ongoing drive to reduce costs
 Legislation, Regulation & Consultation
– Management focus – cost of compliance
– Significant IT resource & cost
 Customer Experience
– Customer Satisfaction Surveys
– Complaints
– Refers/Declines
 … & Fraud
– Data Compromise
– Social Engineering
– New Technology
– Blurring / Cross-Channel
11
PUBLIC
Current Challenges
The independent view
Top Three Financial Services Trends to Watch in 2012
•
UK and European economic outlook
• What impact will the weak economic outlook have on your costs and profitability, and on consumer
behaviour?
• Restrictive regulatory environment
• How are regulations converging to create an intensely restrictive environment, and how should your
business respond?
• Improved customer communication and engagement strategies
• How can the latest developments in customer engagement improve your retention rates and boost
cross-selling opportunities?
12
PUBLIC
Trust in Technology
Moving to Mobile Devices?
Soft Token
How
Secure?
Wallet
13
P2P
PUBLIC
New Technology
Issues
Contactless
 Form Factor
–
–
–
–
Mobile Devices
Card
Sticker/Wristband
Dongle/Fob
Mobile Device – SIM/Memory/MicroSD
 Who controls the Standards?
–
–
–
 Information Leakage (Drive by Attack)
 Lost & Stolen
 Individual/Cumulative Limits
 Form Factor
–
–







Identity/Access/Authentication







Card Schemes / Card Issuers
Mobile Network Operators
Other/New Entrants
Enrolment / Account Opening
E-Identity
Trusted Parties
Passwords – Static/One Time
Tokens – Hard/Soft
Biometrics (Voice etc)
Separation from other channels?
Smartphone / Tablet
SIM / Memory / MicroSD
Virus/Malware
SIM Takeover/Diversion
Device Security
Use as Token
E-Comm/Banking Payments
Wallet functionality
P2P Payments
 Payment Terminals
–
–
–
14
Recognition
EMV or Magstripe?
Device Security
PUBLIC
Consumers see contactless as a
stepping stone to mobile payments
2012 set to be the tipping point for
mainstream contactless adoption
22 December 2011
PayPal to launch redesigned
digital wallet this spring
…reinforce the platform as a
one-stop shop for mobile
commerce in general.
New Square App Turns iPad
Into Cash Register
13 March 2012
Mobile wallet technology could
rescue retailers as many Brits
are not willing to queue
Retailers could be missing out on
almost 21 million opportunities
30 January 2012
12 January 2012
Appetite for contactless card
technology but banks and
retailers need to do more,
research finds
YouGov’s Mobile Wallet study reveals
low awareness and usage rates for
contactless card technology
12 January 2012
Card Fraud Conference 2012
It’s all a matter of trust
Alastair Sheen
Senior Card Fraud Strategy Manager
EuropeRisk
PUBLIC
27 March 2012