Swedish Lenders Shore Up Defenses Against Fraud

Amid growing fraud attacks by organized crime rings, Swedish lenders are moving to adjust product offerings and increase surveillance.

Fraud has grown to become the biggest source of income for criminal gangs in Sweden, Bloomberg reported on Tuesday (Feb. 13), which are taking advantage of the country’s digitalized banking sector.

The bad actors often target elderly people, persuading them to transfer money on the pretext that they represent a bank’s security department, the report added.

After a Tuesday meeting among the Swedish prime minister, the CEOs of Sweden’s largest banks and law enforcement agencies, top bank executives including SEB AB’s Johan Torgeby, Svenska Handelsbanken AB’s Michael Green and Swedbank AB’s Jens Henriksson all said that further measures need to be taken, according to a statement from the Swedish Bankers’ Association, Bloomberg said.

“Banks will strengthen surveillance systems and adjust product offerings to protect their customers,” said Hans Lindberg, the association’s CEO, according to the report. “The banks have a responsibility to do their utmost.”

Financial Markets Minister Niklas Wykman said bank customers may have to accept tighter controls as part of crime prevention efforts, per the report.

“We have been through a period of digitalization, and banks are making a lot of money on that development,” Wykman said. “Now, reality has caught up and the weaknesses in that system are becoming apparent.”

The growing impact of fraud can be felt beyond Sweden’s borders.

Europe’s new top bank regulator wants lenders to improve plans for dealing emerging risks, PYMNTS reported on Monday (Feb. 12).

“Many of the issues dominating today’s headlines were inconceivable a decade ago,” Claudia Buch said in her first speech as chair of the European Central Bank’s Supervisory Board Monday.

“This underscores the need for banks not only to respond to emerging risks, but to anticipate them too.”

The ECB wants lenders to get a better handle on the risk of cyberattacks, rising interest rates, climate changes and a shift to a more sustainable economy.