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A new report from the UK鈥檚 National Crime Agency (NCA) that outlines the breadth and impact of serious and organised crimes (SOC) in the country should prompt payments firms to consider the systems and protections they have in place.
The NCA鈥檚 looks at the prevalence of a range of serious offences in the UK.
These include issues that are of immediate interest to financial institutions (FIs), such as cyber crime, fraud and money laundering, as well as interrelated criminal activity such as modern slavery and human trafficking that firms should be aware of.
Looking back at 2024 data, the assessment notes that the SOC threat continued to increase through the year, with technology the core driver and enabler of the rise in criminal activity.
The bigger picture
The NCA鈥檚 assessment highlights elements of SOC that relate specifically to the financial services sector 鈥 and emphasises the role that technology is playing in criminal activity.
It notes that the public鈥檚 dependence on online services creates opportunities for scammers to target victims, making the UK vulnerable to fraud. It also states that the amount of money laundered in the UK likely increased in 2024, as criminals continued to identify innovative ways to launder the proceeds of their crimes.
Part of this is that international money laundering networks 鈥 including Chinese-speaking organised crime groups and Russian-speaking money laundering networks 鈥 have become more effective in targeting UK consumers via the adoption of technology.
The NCA estimates that 67 percent of fraud reported in the UK is cyber-enabled, and highlights the prevalence of authorised push payment fraud (APP) originating on online platforms, a key topic in the payments industry at the moment.
It also notes that criminals are increasingly using artificial intelligence (AI) in ever more sophisticated fraud attacks against individuals and businesses, including deepfake videos and voice cloning.
Many of these points should be familiar to payments firms, which will likely be experimenting with the use of advanced technology to drive efficiencies in their businesses and counter the threat of bad actors.
Why should you care?
The NCA鈥檚 assessment coincided with the UK Financial Conduct Authority鈥檚 announcement of its new five-year strategy for regulatory oversight.
Setting itself the goal of supporting economic growth, the FCA plans to improve its processes and make greater use of technology to become more efficient and effective.
It also plans to work with industry to boost trust and innovation, updating its approach to ease the regulatory burden and free FIs up to focus on their commercial activities.
However, the NCA鈥檚 assessment is a timely reminder that this loosening of regulatory burdens does not mean firms can relax their vigilance when protecting themselves and their customers.
The report makes clear the scale of the threat the UK and participants in its financial services sector face.
The agency notes that it is realistic to suggest that more than 拢100bn is laundered through and within the UK or UK-registered corporate structures each year. It also points out that fraud is the most prevalent crime against individuals in England and Wales, accounting for an estimated 41 percent of all crime reflected in the in the year ending September 2024.
As such, the easing of regulation in some areas does not signal that all bets are off 鈥 the FCA will still be scrutinising FIs鈥 activity closely and will not be open to a 鈥渇udging of the rules鈥 in the interests of making a quick buck.
The Payment Systems Regulator鈥檚 APP fraud reimbursement rules remain in place and should act as a motivator to payments organisations to scrutinise both sides of transactions to identify and prevent fraudulent activity.
FIs should also heed the warning that criminals are embracing new technology, and make sure they are aware of the various typologies and bolstering their protections against fraud and money laundering, including through the adoption of AI tools of their own.
