Pay.UK’s Fraud Detection Pilot Exceeds Expectations, Detecting Over £112M Worth of Fraud

  • Fraud Detection
  • 30.05.2024 10:30 am

Pay.UK, the independent, not-for-profit operator of the UK’s national retail payments system including Faster Payments, Bacs and Direct Debit, can today announce the results of its pioneering fraud detection and prevention pilot in collaboration with partners Visa, Synectics Solutions and Featurespace.

The pilot exceeded expectations with results showing an average 40% uplift in fraud detection at a 5:1 false positive rate. This would see over £112m worth of fraud detected in a year. The initiative trialled a new overlay service which will allow all UK banks and building societies to analyse money flows and use predictive intelligence to proactively detect fraud and help prevent crime before it occurs, safely and securely.

The pilot was confirmed in June 2023 when Pay.UK contracted industry partners to test the potential benefits of the service with a group of participating banks and payment service providers (PSPs). It ran for three months, with each partner receiving historic Faster Payments transactional data from participating banks and PSPs under a pioneering data-sharing agreement. Each partner independently built machine learning models which identified suspicious activity and compared 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 prevent people and businesses from becoming victims of fraud. The tool has been designed so that is can be adopted by all PSPs, making it a whole market solution which can protect all people and businesses in the UK from becoming victims of fraud, regardless of who they bank with.

Kate Frankish, Chief Business Development Officer and Anti-Fraud Lead at Pay.UK, commented: "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. In 2023, the UK saw 232,429 people falling victim to fraud. 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 pilot has been tested with the whole market in mind and for the benefit of all end users. Pay.UK will work with the payments industry to share the results more widely, and collaboratively find ways to implement this service for the benefit of everyone in the UK.

Quotes from partners:

Mandy Lamb, Managing Director Visa UK & Ireland, commented: “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. 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.

“Visa has already reduced card payment fraud to historic lows, which we are very proud of. We are now bringing our AI capabilities to fight fraud and scams on account-to-account payments before they happen. We are really excited about working with our partners on this – keeping people and businesses safe from scammers is the biggest priority for Visa.”

Martina King, CEO at Featurespace said: “Reducing financial crime at scale requires an alliance of advanced technology and human collaboration,”

“The success of this pilot proves that when the payments industry pools its immense resources, the world becomes a safer place to transact for everyone.”

Rob Bevington, Head of Data Science at Synectics commented: Synectics were delighted to be invited to participate in this ground-breaking, transaction fraud pilot. We see huge value in syndicating data at application stage, so were entirely unsurprised to see that combining syndicated transaction data with transaction specific features, point of application data, and syndicated National SIRA data, produced a compelling solution to the scams problem. With the cost of living crisis, dehumanising effects of APP fraud and imminent PSR mandate it’s great to know that we have found a way to significantly reduce this pain point for consumers and financial institutions alike.

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