A new study from Juniper Research has found that the number of fraudulent banking and money transfer transactions in the UK will increase by 111% over the next five years.
The figures indicate that fraud will increase from £4.2 million in 2024, to £8.8 million in 2029 with fraudulent transactions totalling £38 million over the next five years.
Despite the UK being one of the most technologically developed FDP (Fraud Detection & Prevention) markets, it anticipates additional measures, such as Artificial Intelligenec (AI)-based real-time FDP, will be required to mitigate the growing threat of fraud.
The research also predicts the UK’s upcoming PSR (Payment Systems Regulator) reimbursement regulation will significantly impact fintechs’ adoption of FDP solutions.
The regulation aims to reduce fast-growing APP (Authorised Push Payment) fraud; the act of fraudsters tricking their victims into willingly making large bank transfers. However, increasing concerns surround the regulation’s impact on faster payments; potentially slowing them to ensure APPs are legitimate. Therefore, AI needs to be implemented into FDP systems to enable financial institutions to quickly identify APP fraud without diminishing the value of faster payments.
The research also identified data sharing between stakeholders in the payments landscape as vital to maximising the value of FDP solutions, especially within faster payments where real-time fraud detection will be key.
Report author Cara Malone said “The plethora of data collected throughout the payments processes will be utilised to develop several different FDP tools, ranging from behavioural biometrics to identification.”
