The Current Account: The Latest Headlines From Across The Banking Sector - April

Welcome to The Current Account! We hope you enjoy our latest round-up of the top news from the industry in April.

Headlines from the banking sector this month

In this edition of The Current Account, we focus on Fraud in the Banking Sector, and the challenging jobs market.

Combatting Fraud

• Banks work hard to stay one step ahead of fraud, and the regulation that surrounds it is becoming increasingly more stringent. Fraudsters are becoming more advanced in their methods to defraud Banks (and their customers) and as a result, the volume and complexity of fraud is increasing
• Impersonation fraud has increased by 300% since 2019 and Friends and Family fraud is on the rise (fraudsters pose as a relative or friend requesting financial support). We’ve also seen instances where Open Banking has been used to carry out fraudulent transfers
• As we see challenger Banks increasing their market share due to their seamless onboarding processes and digital offerings, they have been warned about their inadequate financial crime checks by the FCA
• It is not only Banks and their customers that are impacted by inadequate fraud controls, but retailers are also impacted too - UK retailers lost £130 million in sales due to not being fully compliant with new Strong Customer Authentication (SCA) which came in to force last month
• The sophistication of fraud introduces an opportunity for third parties to develop and offer innovative fraud detection and prevention solutions. IBM has introduced real-time AI for transaction processing and New Zealand based First AML has launched its cloud-based platform in the UK
• Whilst the measures being introduced by Banks are to protect customers, there are some who are becoming frustrated with some of the processes, and at times ignoring prompts to designed protect them

PEN Point Of View:

There is a greater focus on fraud in today’s market due to increased awareness resulting from a number of high-profile failures over the past few years and increased fraud opportunities driven by the pandemic and increased regulation. Banks will have to continue to prioritise investment in systems, controls, people and third parties to reduce their risk exposure and to stay on top of it.

The strongest jobs market in more than a decade

• We’re seeing the strongest jobs market in more than a decade. The sector continues to experience a very competitive recruitment market, making it difficult to hire – something our clients are particularly experiencing in the fast-moving world of change delivery
• It stems from the Great Resignation – a period where, following the pandemic, a huge number of people are moving jobs. This is largely down to employees having more bargaining power and increased choice as a result of hybrid working
• A recent Gartner report indicates it doesn’t show any sign of slowing down, particularly for IT talent, something that should be high up the priority of CIOs to resolve
• As a result, organisations are having to come up with inventive ways to attract and retain employees

PEN Point Of View:

Attracting and retaining talent has become a critical business risk. Developing and nurturing a positive company culture with a human-centric focus is key. Although this can take a long time to embed, failure to do so will see organisations left behind by competitors.

And in case you missed it…

• The Bank of England has increased the Base Rate to 1%, the highest its been in 13 years. The change means higher mortgage payments for everyone on variable rate mortgages.
• Banks are starting to look at ESG more holistically than the bare minimum recommendation of embedding climate change within their risk framework, and this month we’ve seen Mastercard linking employee bonuses to ESG goals, and NatWest partnering with Edinburgh University on a climate education programme
• Atom is launching a new tool for instant indicative business loans quotes, for use by brokers.

We’d love to hear your thoughts on this month's edition, connect with us and share on LinkedIn, and we look forward to continuing the series.

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