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Pay.UK’s fraud detection and prevention pilot, in collaboration with Visa, Synectics Solutions and Featurespace, has shown a 40 percent uplift in fraud detection.
Pay.UK, the independent, not-for-profit operator of the UK's national retail payments system, has announced the successful results of its fraud detection and prevention pilot.
The pilot exceeded expectations, achieving an average 40 percent increase in fraud detection at a false positive rate of 5:1. This improvement could lead to the detection of over £112m worth of fraud annually, according to Pay.UK.
"The positive results from this pilot demonstrate the importance of innovation and cross-industry collaboration in developing effective solutions to stay ahead of fraudsters and protect people in the ever-changing payments landscape,” said Kate Frankish, chief business development officer and anti-fraud lead at Pay.UK.
“In 2023, the UK saw 232,429 people falling victim to fraud,” said Frankish. “To reduce the scale of the crime that is happening we need a unified approach, and this future service will be a major step forward.”
The initiative trialled a new overlay service designed to allow all UK banks and building societies to analyse money flows and utilise predictive intelligence to proactively detect fraud, helping to prevent crime before it occurs in a safe and secure manner.
Starting in June 2023, Pay.UK contracted industry partners to assess the potential benefits of the service with a group of participating banks and payment service providers (PSPs).
Over a three-month period, each partner received historic faster payments transactional data from the participating banks and PSPs under an innovative data-sharing agreement. Using this data, each partner independently developed machine learning models to identify suspicious activity by comparing it to known fraudulent behaviours.
The results show that the new overlay service has been successful in detecting fraudulent activity before it occurs, showing its potential to help prevent people and businesses from becoming victims of fraud.
The tool has been designed so that it can be adopted by all PSPs, meaning it can protect all people and businesses in the UK from becoming victims of fraud, regardless of who they bank with.
“The UK has one of the most developed payment systems in the world, but also sees some of the highest levels of account-to-account fraud,” commented Mandy Lamb, managing director of Visa UK & Ireland.
For example, cases of authorised push payment (APP) fraud jumped by 12 percent from 2022 to 2023, with total losses amounting to £459.7m.
“Once fraud happens, the money is in the hands of the criminals, so fraud prevention must be our collective goal, in the financial services industry and beyond,” said Lamb.
Martina King, CEO at Featurespace, meanwhile commented that fraud “is the single largest crime in the UK”.
“But the UK is leading the charge to tackle this issue and the game-changing pilot with Pay.UK is one that the world has been watching,” said King. “It shows the immense power of collaboration and technology, and the scale of positive change that is possible when the payments industry works together to tackle fraudulent activity.”
