Pay.UK has revealed impressive results from a fraud detection pilot conducted in collaboration with Visa, Synectics Solutions, Featurespace, and several banks and payment service providers (PSPs). The pilot, which aimed to tackle the rising issue of Authorised Push Payment (APP) fraud, has the potential to save the UK economy over £112 million annually.
APP fraud has surged to become a major concern in the UK, with losses reaching around £500 million last year. In response, Pay.UK, which oversees the national retail payments system, initiated a three-month trial featuring a new overlay service. This service enables UK banks and building societies to leverage predictive intelligence and analyze money flows to detect and prevent fraud before it happens.
Under a data-sharing agreement, tech partners received historical Faster Payments transactional data from participating banks and PSPs. Each partner then developed machine learning models to identify suspicious activities by comparing them with known fraudulent behaviors.
The results were remarkable, with the pilot achieving an average 40% increase in fraud detection at a 5:1 false positive rate. This success translates to over £112 million worth of fraud potentially being detected annually. Visa reported that its AI tool alone identified an additional 54% of fraud and APP scams beyond what the banks’ systems could detect. The company estimates that its real-time fraud detection service could potentially save the UK economy over £330 million each year.
Pay.UK has designed the fraud detection tool to be adoptable by all PSPs, ensuring widespread benefits across the financial sector.
“In 2023, the UK saw 232,429 people falling victim to fraud,” said Kate Frankish, Chief Business Development Officer and anti-fraud lead at Pay.UK. “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.”
