Cyberattacks and fraud cost UK retail sector £11bn in 2023

The research, in partnership with the Centre for Economics, Business and Research, found that 35% of UK businesses became a target of fraudulent activity, cyberattacks or data leaks over the past year – up 37% compared with 2022.

Adyen also found that retail fraud cost enterprises an average of £1.4m, with luxury fashion retailers losing £2.8m, clothing and accessory retailers £2.6m, and health and beauty brands £1.1m each.

Shoppers have also been targeted, with 33% saying they were victims of payment fraud last year, compared with 23% in 2022.

This has affected shopper behaviour as 26% of consumers feel more unsafe when shopping today than they did 10 years ago, due to the higher risk of payment fraud.

While there has been an increase in fraudulent activity, only 63% of businesses said they have effective fraud prevention systems in place.

However, 47% said they have “actively considered changing” their payments provider to one that can offer better-quality fraud defences.

The research further found that businesses forecast to grow revenues by 50-100% or more lost the highest amount due to fraud. 

Adyen emphasised that fast growth “must be met with the right technologies in place” to protect both the business and consumer.

Adyen chief commercial officer Roelant Prins said: “Fraud is a pervasive challenge for retailers, and today’s findings demonstrate how it can significantly impact profits.

“Criminals are deploying more sophisticated methods when they attack businesses, including the application of AI, and it’s therefore critical to invest in the right defence mechanisms to protect the company and customers.”

“There’s no single solution to fraud defence as a strategy will need to be tailored based on the business model and platforms used to make sales. 

“With technology in place, such as machine-learning tools, retailers should be able to recognise genuine customers and spot fraudulent activity across their sales channels.”