Fraud is far from a victimless crime. It is a pervasive, ever-evolving threat that harms individuals, undermines our economy, and threatens national security. Beyond the billions it steals every year, fraud inflicts deep psychological wounds on its victims, eroding confidence, compromising mental health, and, in the most tragic cases, leading to the loss of life.
Fraud is an insidious human crime that affects every aspect of our society. It leaves no one untouched but often has the most significant impact on those with the least to lose.
In an increasingly digital and connected world, fraud has become the most prevalent crime in the UK. Its frequency and impact continue to escalate, with the latest statistics from the Office of National Statistics (ONS) suggesting fraud has surged by 19% in the last year.
UK Finance members recorded 3.31 million fraud cases in 2024. Hidden behind the statistics are ordinary people, who – as I've already observed – suffer detriments beyond the mere loss of money. The fight against fraud is relentless and fundamentally asymmetrical. While the financial services sector is highly regulated, fraudsters have no such constraints. Organised crime groups, often with international reach, are responsible for most of the high-impact fraud in the UK, while also dabbling in a litany of other criminal endeavors, trafficking drugs, people, and guns, financing terrorists, laundering money, and pursuing illicit gains from any other income stream they deem worth the risk.
Recent media investigations describe transnational criminal operations out of Southeast Asian trafficking victims from all over the world to work, often under significant duress, in scam factories. Meanwhile, here in Europe, young people from Sweden have relocated to Spain to commit bank impersonation fraud. To the east of the continent, a data leak exposed the innerworkings of crypto-investment-fraud gangs out of Georgia.
Despite these sobering realities, the annual Fraud report from UK Finance demonstrates the UK remains a global leader in fraud-detection and -prevention and mitigating financial detriment. In 2024, the industry prevented £1.45 billion of unauthorised fraud, 16% higher than the previous year and equivalent to stopping 67p in every £1 a fraudster tried to steal. With more than 98% of all unauthorised fraud in the UK reimbursed, the scope for financial detriment is low. This contrasts with other developed nations where consumers often struggle to get their money back, especially when there is a suggestion that the customer was negligent.
The UK has also seen progress in the case of Authorised Push Payment (APP) fraud, where criminals trick victims into transferring money directly to them. APP losses fell by 2% to just over £450 million in the UK last year, with case volumes dropping to their lowest level since 2021. These outcomes reflect the financial sector’s significant and ongoing investment in fighting financial crime.
But success breeds adaptation. As customers have become better protected from APP fraud, criminals have shifted their focus to other forms of fraud. Remote purchase fraud, for example, has surged, underscoring the principle that fraud never disappears; it just evolves.
While reimbursement can make a victim financially whole, it can neither undo the psychological trauma suffered by the victim nor deter the fraudster behind it from committing fraud again in the future. It seems likely APP controls will contribute to the continued displacement of fraud to other channels, with international payment channels likely to become a focus. I would be surprised if criminals didn't see pressure for the Single European Payment Area to adopt real-time cross-border payments as anything other than a significant opportunity.
Objectively, we should not simply set out to “solve” fraud (were this even possible) but instead to reduce its prevalence and impact by disrupting criminals. We should seek to create cost whilst robbing them of the financial gains that motivate them to commit fraud. To do this, we must adopt technologies that allow for real-time, early intervention. Identifying behavioural anomalies in digital channels and paying close attention to device reputation and transactional patterns enables us to create friction for criminals while allowing legitimate customers to transact with minimal friction.
Collaboration is also key. No single financial institution has the whole picture. In Australia, BioCatch has partnered with that nation’s largest banks to launch the world's first behaviour-based financial crime intelligence-sharing network. Australian banks are also supporting customers to actively identify risk, with National Australia Banks (NAB) reportedly causing customers to abandon close to $50 million of payments over two months.
As things currently stand, the banking sector is often the last line of defence, but fraud typically begins upstream of the banks with phishing, fake ads, and scam calls, contributing to fraud losses. It is time for these other sectors to invest in active fraud prevention, adopting a similar fraud-fighting posture to their financial services sector counterparts would significantly impact fraud’s financial and non-financial consequences.
Public awareness also plays a crucial role. Unfortunately, the public often struggles to see themselves as potential victims of fraud, preferring to believe they are savvy enough to identify the risk. There is a reason why you rarely see a driver or passenger in a car not wearing a seatbelt: consistent education, the visceral consequences of failing to do so, and technology have resulted in high levels of compliance. Regardless of the industry's efforts, the government must commit to the consistent education of citizens.
Speaking of government, policy also needs to keep pace with the threat. While the Online Safety Act is now law, holding platforms accountable for illegal conduct is taking too long. The upcoming government fraud strategy must provide direction and suitable incentives to support collaboration within and beyond the financial services sector.
Given its scale, complexity, and connection to organised crime, fraud must be treated as a national security issue. Law enforcement’s response to fraud remains inadequate. The government must seek to address leadership gaps, a lack of innovation, missing skills, and inadequate resource levels directed toward the fraud threat.
Public confidence is at stake. A reduced willingness to use digital services will increase costs across the public and private sectors. It also damages the business case for innovation, investment, and the prospect of sustained long-term growth.
We will never eliminate fraud, but it can be contained, deterred, and made unprofitable (for criminals). With a strategic approach that fosters collaboration across the financial services sector, tech, telecoms, government, and society, significant scope exists to increase prevention and reduce the gains that criminals currently see.
Let's stop merely responding to the fraud threat. We need to innovate at the same pace as the criminal fraternity, as when it comes to fraud, action will always beat reaction.
