27 Jul 2023
£1.2bn lost to financial fraud in 2022 – how can British companies fight back?
UK Finance’s Annual Fraud Report makes for uncomfortable reading, but there are effective weapons to combat financial crime…
Without a doubt, financial fraud is big business. In its Annual Fraud Report, UK Finance revealed that its members had registered over £1.2bn stolen by criminals through both authorised and unauthorised fraud in 2022 alone. That’s an eye-watering £2,300 every minute.
Of this £1.2bn, unauthorised fraud losses from payment cards, remote banking and cheques accounted for £726.9m. This included criminal use of stolen and lost cards online, over the phone or through mail order.
Meanwhile, authorised push payment (APP) fraud losses reached £485.2m. 57 per cent of these reported cases related to purchase fraud. However, investment fraud continued to be a large proportion of APP losses – standing at 24 per cent.
Most APP frauds (78 per cent) originate online, while 18 per cent are committed via telecommunications. What’s interesting about this is that although the telecommunication frauds accounted for only 18 per cent of cases, they include impersonation fraud and are usually of a much higher value. In 2022 they accounted for 44 per cent of losses.
The report did point out that there has been an improvement – despite £1.2bn being stolen through financial fraud in 2022, this figure has fallen by eight per cent on the previous year. The total number of fraud cases across the UK had also reduced by four per cent. That said, not only is there still a lot of room for improvement, but it’s not the end of the great fraud story.
The Police Professional website recently published its own response to the Annual Fraud Report. They discussed how a new National Fraud Squad is to overhaul how scams are investigated, including use of an intelligence-led approach to be put into action by 400 new specialist investigators.
They also pointed out that 70 per cent of fraud in the UK either originates overseas or has an international link.
The Association of Police and Crime Commissioners also weighed in, saying that the Government’s new fraud strategy “fails to recognise” the “fundamental challenges” in investigating the crime and the devastating impact on victims.
Louise Hodges, head of the Criminal Litigation practice at law firm Kingsley Napley added: “Unfortunately, this fraud strategy, which puts forward a few hundred specialist investigators to tackle 40 per cent of all recorded crime, will simply not be adequate to address the current scale of economic crime.”
Then there’s also the new The Economic Crime and Corporate Transparency Bill to add to the mix. Although it promises to make reforms to Companies House and create additional powers to seize and recover suspected criminal cryptoassets, the gaps in information about fraudulent crimes remain wide.
The last thing a business needs is to become one of the victims of the increasingly sophisticated and lucrative billion-pound fraud industry. The primary problem is how to fill in those dangerous information gaps to identify fraud and reduce the likelihood of being snared by it in the first place.
mnAi understands that prevention is by far the most intelligent solution, and that sophisticated financial fraud takes sophisticated Connected Data and analytics to combat it.
Our risk detection and fraud analytics software has been established from a unique and proprietary database of over 9m companies and in excess of 6.9m unique officer profiles.
Using cutting-edge technology, our Connected Data algorithms look for hidden patterns within officer networks whilst critical markers (debt, group structures, financials etc) identify risk.
With billions of data points covering active and dead companies, our advanced analytics identify sectors, companies and people of interest. One of the many advantages of this is that it crushes the ability of corporate financial criminals to dodge the minimal checks they undergo when setting themselves up as directors.
If you’re interested in a personalised interactive demo of the mnAi platform in action, you can book one right here