UK retailers’ investments in security are helping to keep levels of online fraud low, according to Cybersource’s third annual Online Fraud Report.
The report, carried out by research company Vanson Bourne, surveyed 150 UK retailers – 73% of which reported that losses from fraud have stalled or fallen as a proportion of revenue.
More significantly, 58% reported that losses to fraud in terms of monetary value have either fallen or remained the same, despite recent reports that the effects of online fraud are increasing.
The report puts this relative success in combating fraud down to increased investment by online retailers in anti-fraud measures – 60% of those surveyed have increased their spending on fraud management, though many still rely on manual review.
CyberSource MD Nathan Jackson is encouraged by the results:
“This year’s report is further evidence that online retailers are not a soft target as they have sometimes been portrayed.
“By deploying a range of tools to create defence in depth, and adding new tools as they become available, retailers are making the online shopping environment increasingly secure.”
The report also suggested that retailers place more trust in their own actions and those of industry groups in combatting fraud, rather than the police. Only 15% expected police action to have any impact on fraud levels, whereas 56% put their trust in industry measures such as Card Verification Numbers, and 51% in automated fraud screening tools.
Though it presented a generally positive picture, the report did criticise retailers that relied too much on manual review to combat fraud. It remains the third most popular fraud detection tool, despite it being both the most expensive and most unreliable method.
Retailers who responded to the survey vetted an average of one in three transactions, using one to three staff for the process. Despite the availability of automated solutions, 38% of companies had no plans to introduce such solutions.
Also see the notes from our
Online Fraud Roundtable Briefing
for more info on anti-fraud measures.