The UK witnessed a sharp rise in online fraud attacks in 2022, nearly doubling the volumes as the scam-demic continued, according to a recent analysis by LexisNexis Risk Solutions.
The study revealed approximately 36 million human-initiated fraud attacks in the UK, marking a 92 per cent increase from the previous year. In contrast, the global rate of growth stood at 56 per cent.
The analysis further highlighted a significant rise in automated bot attacks, with UK targets experiencing 352 million such attacks in 2022, an 81 per cent increase compared to the previous year. These bot attacks accounted for around two per cent of all online transactions in the UK.
Characterised by sophisticated algorithms and automated scripts, bot attacks encompass a wide range of cyber threats, including website disruptions, phishing attempts, and smishing attacks aimed at data theft.
These findings are based on the analysis of over 15.8 billion UK transactions processed through the LexisNexis® Digital Identity Network. However, despite the surge in fraud volumes, the UK showcased a relatively lower attack rate compared to the rest of the world.
UK outlook
The success rate of fraud attacks, measured as the proportion of successful attacks to overall transaction volumes, stood at 0.2 per cent in the UK, significantly lower than the global rate of 1.3 per cent.
The UK’s advanced financial services market, investing billions each year in sophisticated technology-driven fraud prevention solutions, contributes to this lower attack rate. Furthermore, the high adoption of mobile and app-based online banking services has played a crucial role in mitigating successful fraud attempts targeting UK customers. Nearly 88 per cent of financial services transactions in the UK are processed on mobile, with 89 per cent of them occurring through apps.
Among the various types of fraud observed in the UK analysis, scams constituted the dominant category, accounting for 38.2 per cent of fraud attacks, followed by first-party fraud at 29.3 per cent and third-party account takeover fraud at 13 per cent.
Rob Woods, fraud and identity expert for LexisNexis Risk Solutions, UK & Ireland, highlighted the positive outlook for the UK in its fight against fraud.
“Despite rising overall volumes, this analysis shows that the UK’s highly-evolved and tech-enabled fraud prevention market is successfully mitigating fraud such as large scale third party fraud, that is causing significant pain elsewhere in the world. Inevitably, other fraud typologies are emerging to fill this vacuum, including First Party Fraud – now a big problem in the UK.”
Impact of fraud
According to Woods, the UK financial services sector is making significant strides in reducing the impact of fraud on its customers by embracing AI-powered fraud analysis, shared intelligence, and the growing utilisation of secure mobile and app channels for online services.
“As fraud attacks continued to increase during the past 18 months, financial institutions have responded well by focusing more on building trust with their loyal customer base, leading to higher levels of ‘trusted customer traffic’ that can be quickly authenticated and given access to online services, leaving more capacity for banks to focus on detecting and preventing malicious traffic.”
“However, whilst fraud attack rates are lower in the UK, they increased at a faster rate last year meaning that although the news is positive, businesses cannot afford to be complacent.”
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