The Financial Conduct Authority has made a call to action as it looks to work with the industry to tackle financial crime.
In a speech delivered at the Westminster Legal Policy Forum keynote seminar, Andrea Bowe, director of the specialist directorate, said the dial was beginning to shift on the fight against fraud but warned “we should be under no illusion about the scale of the problem to fix".
According to Bowe, fraud made up 36 per cent of all the crime reported in England and Wales, with 3.2mn incidents in the year to March 2024.
However, this represented a 16 per cent fall on the year before and there were half a million fewer victims last year compared with 2022.
“Saying that, while some fraud figures may have fallen, we know from recently released Financial Ombudsman Service figures, that scam related complaints have reached their highest level since early 2018.
“It is too early to be definitive that this is part of a longer-term pattern, but these statistics show, perhaps, that losses are stabilising. If that is true, it is no mean feat given the fast-evolving nature of fraud typologies and the development of emerging technologies.
“And, whilst visions of a fraud-free financial services landscape are still very distant, if sustained, it would show us moving in the right direction,” Bowe added.
She highlighted “collaboration and a collective effort” were key to tackling fraud saying the FCA could not “do it alone”.
Bowe said: “We recognise the importance of a coordinated national response, bringing together multiple public and private organisations to tackle the significant issue of fraud.
“One way in which we are seeking to do this is through working closely with industry to develop practical answers.
“So often, the relationship between regulated and regulator can be seen as adversarial. What the outside world sees are criticisms made, fines levied, formal action taken. What is often less obvious is that we have a mutual interest in tackling the scourge of financial crime, not least because it inhibits growth by diverting funds that could go to investment into criminal coffers instead.
“That is why we want to work with industry, by providing more guidance on how we can jointly tackle financial crime, and greater transparency with it, on threats we see developing and how we, together, can tackle them.”
A crucial area that needed joint action was stopping the cash-out of the proceeds of fraud through money mule activity, according to Bowe.
“Firms must adopt a collaborative approach, prioritising not only the sharing of information on suspected mules, but also acting swiftly when such information is received, whether through internal or external channels.
“Addressing mule activity is an area where our collective efforts can have a substantial impact on disrupting criminal operations and greatly reducing the flow of fraudulent funds,” she added.
Bowe said there needed to be renewed effort and a collective ability to innovate in order to meet the “ingenuity” of fraudsters.
