Industry body for UK fintech Innovate Finance has released a new anti-fraud strategy in which it proposes that the UK government establishes a National Anti Fraud Centre to enable real-time cross-sector data sharing.
In ‘A Technology Strategy to Smash Fraud’, Innovate Finance has set out a plan to halve fraud in the UK by 2028, which includes the introduction of shared liability for social media and telecommunications firms.
According to Innovate Finance, fraud accounts for more than 40% of crime, but receives less than 1% of police resources.
Innovate Finance has called on the government to create a National Anti Fraud Centre that can “scale-up, connect and industrialise” the range of initiatives in the fraud data-sharing space and ensure that these are easily accessible by firms of all sizes.
The plan also discusses the leadership of the Centre, with accountability at the highest levels of Government being a priority, and ensuring it is funded in a way that “does not add pressure to the public purse”.
Innovate Finance’s anti-fraud blueprint also calls for the introduction of new shared liability rules to ensure Big Tech social media and telecommunications firms tackle fraud being conducted on their platforms.
Currently, while digital social platforms are the single largest source of fraud origination, payment service providers are typically held solely responsible for reimbursing victims of fraud.
Innovate Finance wants to see the Online Safety Act 2023 amended by the government to introduce a reporting framework, setup a fraud origination redress fund, create a distribution mechanism to issue from reimbursements from responsible parties, and establish a dispute resolution process.
Janine Hirt, chief executive officer, Innovate Finance
“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,” said Janine Hirt, chief executive officer of Innovate Finance.
“This plan sets out how we can harness technology via data sharing to strengthen collaboration between industry and law enforcement. Current data-sharing initiatives, while effective, operate in silos, which can make it difficult in practice.”
She added: “Critically, there is nothing in place with the critical mass or scale required to crush organised fraud. There is widespread agreement that establishing a National Anti Fraud Centre would be the appropriate vehicle to deliver this.”
The aim of the strategy is to building a “world beating” UK anti-fraud tech industry, which can create jobs and growth, and export solutions.
Luke Charters, MP for York Outer, said countering the threat of fraud requires a “coordinated, cross-sector response”, with expertise from financial institutions, regulatory bodies, law enforcement, and policymakers.
“To effectively combat fraud at scale, I believe we should establish a national anti-fraud centre,” he added.
“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.”
Further reading: Global fintech investment declines 20% in 2024 amid ‘economic turbulence’
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