Fintech trade body calls on the government to establish a national centre to help businesses across different sectors fight fraud through data sharing.
Innovate Finance said that current data sharing initiatives designed to fight fraud operate in silos, which means the country lacks the “critical mass” or “scale” needed to stop fraudsters.
The call for an anti-fraud centre came in the organisation’s plan to halve fraud in the UK by 2028, titled A technology strategy to smash fraud.
This includes: “A world-first data sharing approach across sectors, regulators and law enforcement industry, to industrialise the UK’s use of technology to spot and stop fraud and enable all financial firms – large and small – to access and use these solutions.”
It also calls for shared liability for social media and telecommunications platforms for fraud originating on their platforms and networks, as well as building a UK anti-fraud tech industry.
Janine Hirt, CEO at Innovate Finance, said that while fraud accounts for over 40% of crime, it receives less than 1% of police resources. “Given the scale of the threat posed to consumers and businesses alike, we urgently need a more collaborative, targeted and effective strategy that aspires to smash fraud in the UK,” she said.
Another data sharing initiative designed to fight fraud was initiated by Stop Scams UK, through its intelligence-sharing pilots. It sees banks and tech firms coming together to share information on fraud to give them visibility of the attacks targeted at customers.
The collaboration has brought together banks such as HSBC, NatWest and Santander with tech firms Amazon, Google and Meta.
Last year, a Which?-led coalition of banks and telecoms operators called on the newly instated Labour government to take the lead on enabling data sharing to help fight digital fraud.
But Hirt said a national centre for current anti-fraud data sharing activity needs to be strengthened. “Current data sharing initiatives, while effective, operate in silos, which can make it difficult in practice,” she said. “Critically, there is nothing in place with the critical mass or scale required to crush organised fraud.”
She said there is “widespread agreement” that establishing a national anti-fraud centre could help deliver this.
Hirt also said laws, including the Online Safety Act 2023, need to be updated to make tackling crime a shared responsibility between payment providers and the social media and telecommunications firms.
‘Immeasurable’ pain and distress
Luke Charters, MP for York Outer, said the pain and distress caused by fraud are “immeasurable”.
“Effectively countering this threat requires a coordinated, cross-sector response, leveraging expertise from financial institutions, regulatory bodies, law enforcement and policymakers alike,” he said. “To effectively combat fraud at scale, I believe we should establish a national anti-fraud centre. By uniting insights, intelligence and expertise from across industries, this centre could serve as a formidable force against fraudsters, enabling real-time threat detection and disruption.”
Hirt said the benefits of investment in fighting fraud would go beyond creating a safe place to invest and create an industry.
“The aim of the strategy is to not only reinforce the UK’s international competitiveness as a safe place to invest, but also frame the focus for the UK to develop and export new anti-fraud regulatory technology (RegTech) solutions,” she said.
According to Innovate Finance, the RegTech sector, a subset of fintech, is projected to be worth $246bn globally by 2032.