UK Has Seen the Biggest Increase in Online Fraud in the Past 12 Months According to Ravelin Research

According to research from fraud prevention platform Ravelin, the UK economy and businesses that reside within it are at great risk, as the UK’s online fraud presence has increased the most out of 10 countries surveyed in the past 12 months.In its fourth edition of the Fraud and Payments Survey Ravelin has revealed that 84 per cent of UK merchants have confirmed an increase in online fraud. Australia saw an 83.4 per cent increase while Spain saw an 81.3 per cent increase. In the 10 countries surveyed (including France, Germany, Italy, America, Brazil and Mexico), fraud has increased for 74.8 per cent of businesses in the past 12 months.One in four of the businesses polled by Ravelin say they lose over $15million (£12million) to fraud every year. Additionally, 51.8 per cent said fraud is stifling their company leading to wider knock-on impacts. Reputations, revenue, and in turn stock value are taking a hit as amateur and professional fraudsters adopt new tactics, techniques and technologies to steal from brands.In the survey, 19.9 per cent of respondents said stock price is damaged as a result of fraud. Well over a third of businesses (40.4 per cent) say their brand image is affected as well. In the UK, 61.1 per cent of businesses have been mentioned in the press or on social media in relation to fraud. In Australia, 83.3 per cent have suffered this kind of negative publicity.Further impacts of fraudGrowth, revenue, and reputation are far from the only things impacted by the rise in fraud. Staff morale can be affected, with nearly a quarter (24.3 per cent) saying this is an issue. Over a third (36.9 per cent) say it hurts customer loyalty while 37.1 per cent of merchants say fraud has driven poor customer satisfaction and churn.Martin Sweeney, CEO, RavelinRavelin CEO Martin Sweeney said: “Online fraud shows no signs of slowing down. The speed of adoption of new tactics and technologies such as AI by fraudsters, both amateur and professional, is happening at breakneck speed. The democratisation of fraud affects us all.“Many merchants are deeply concerned about the impact on revenue, growth and reputation so it’s crucial to be fully up to speed with the idiosyncrasies and trends of this fast-changing fraud landscape.“Across fraud leaders in our four key sectors of the market, machine learning was once again recognised as integral to fraud fighting efficiency. Machine learning models and features offer flexibility and scalability in the face of transforming threats.”What’s powering the global growth of fraud?AI-powered fraudPredictions about artificial intelligence-enabled fraud have been everywhere. According to the Ravelin report, it’s well and truly here, with nearly two-thirds of merchants (63.6 per cent) having seen criminals use AI technology against them (inclusive of large language models (LLMs), machine learning, synthetic IDs and other applications).Respondents are concerned that AI-powered fraud will impact growth (50.5 per cent), brand image (39.8 per cent) and customer loyalty (39.2 per cent).Friendly fraudFirst-party fraud (also called ‘friendly fraud’) is also on the rise in many parts of the world. Topping the list for friendly fraudsters are the UK, Australia, and Spain, up to 54.4 per cent of merchants estimating customers are now more likely to attempt fraud.Unsurprisingly, many merchants (58.6 per cent) agree they must do more to tackle fraud but are often prevented from doing so because of budgetary (39.4 per cent) concerns, or concerns that it could introduce friction that will cause customers to churn (38.2 per cent) – which is not the case with tech-forward solutions. Another key blocker is a lack of awareness of the benefits from other outside teams (35.9 per cent).How can it be stopped?Automation in the form of machine learning is widely seen (66.2 per cent) as the most useful implementation of AI for fraud prevention, ahead of LLMs (46 per cent), generative adversarial networks (GANs) (38.7 per cent) and big data analytics (36.8 per cent).Across the board, two-factor authentication (2FA) – which includes technologies such as 3D Secure and biometric verification – is the most popular fraud-thwarting tool (54.1 per cent).Sweeney added: “In our industry, knowledge-sharing is one of the most powerful tools in our arsenal so we hope the insights we’ve gathered in our latest report will help inform new thinking and approaches about tackling online fraud.”