As fraud continues to rise sharply in the UK, industry body UK Finance has called for a fundamental rethink in how scams are tackled, warning that current bank-focused approaches are no longer sufficient. With fraud losses surpassing £629 million in the first half of 2025 – a 17% rise in cases – the spotlight is now on shared responsibility across the digital ecosystem.
Current Challenge
UK Finance reported that criminals are increasingly exploiting digital channels, including social media platforms, messaging apps, and even legitimate websites, to launch authorized push payment (APP) scams. These involve tricking victims into willingly transferring money to fraudsters, making them harder to detect and reverse.
Traditional banking defences, often focused at the end of the customer journey, are proving insufficient. Fraudsters today aren’t breaching systems – they’re manipulating people.
Shifting Upstream
The central proposal is to “move upstream” – embedding fraud prevention earlier in the digital experience, not just at the payment stage. This includes integrating security protocols at the start of user interactions, where threats can be more effectively intercepted.
Rather than creating friction for all users, the goal is to deploy targeted interventions only when real threats are detected – creating a balance between user convenience and strong protection.
A Multi-Sector Response
To succeed, cross-industry collaboration is essential. UK Finance is urging cooperation between:
- Banks and financial institutions
- Telecommunications companies
- Social media and tech platforms
- Fintechs
- Regulators
These groups must commit to:
- Real-time data sharing
- Joint investment in detection technologies
- Shared responsibility for fraud prevention
Standalone defences can no longer keep pace with organized fraud networks and rapidly evolving technological threats.
Policy and Education Measures
Government-backed initiatives are helping to shift the landscape. These include:
- The Online Safety Act, which requires online platforms to curb illegal activities
- The Online Fraud Charter, committing tech firms to act against scams
Longer term, reforms to financial education are also being introduced. By 2028, financial literacy will become a mandatory subject in UK schools, aiming to help young people know risks and resist fraud – especially social media-driven threats like money mule recruitment.
Role of AI in Fraud
One of the most pressing threats is the rise of artificial intelligence in scam operations. AI now enables fraudsters to:
- Clone voices
- Create deepfake videos
- Craft realistic phishing messages
This makes traditional verification methods – like passwords, voice checks, or even face ID – less reliable.
UK Finance highlighted the importance of removing human input from key decisions, particularly in authentication. Instead, fraud prevention should focus on:
- Network-level signals
- API-based checks
- Device health and SIM status
- Location and connection consistency
These underlying signals are more resilient and harder for AI to mimic or manipulate.
Proactive Future
This marks a paradigm shift: from reactive defences to proactive, embedded security. The industry must now focus on system-wide resilience, treating fraud not just as a banking issue, but as a broader challenge across the digital ecosystem.
UK Finance concluded that collaboration and innovation will be key in restoring trust in digital finance and reducing losses. As fraud tactics become more advanced, so must the systems designed to stop them.
FAQs
Why is UK Finance calling for change?
Because fraud losses rose to £629m in H1 2025, up 17%, showing current methods are not enough.
What does ‘moving upstream’ mean?
It means embedding fraud prevention earlier in digital user journeys, not just at payment stage.
How is AI used in scams?
Fraudsters use AI to clone voices, create deepfakes, and bypass human verification checks.
What industries need to work together?
Banks, tech firms, telcos, fintechs, and regulators must share data and tools.
