In 2024, Payment Expert attended some of the sector’s most prominent events, exploring how technology and regulation are shaping the fight against fraud.
From app-based scams to AI-powered detection systems, fraud prevention was a critical theme across panels and discussions, with industry leaders outlining their vision for a safer digital future.
In March, at Pay360, Payment Expert heard one of the year’s most impactful quotes. Phillip Mind, Director of Digital Technology and Innovation at UK Finance, remarked: “Trust is hard earned and quickly lost,” during a discussion on the challenges of implementing Digital IDs.
For context, the European Union (EU) is preparing to introduce a comprehensive digital ID framework. This initiative aims to address key trust and security concerns, providing all EU citizens with a secure, unified digital ID through a digital wallet by 2030.
However, as Mind pointed out, the greatest challenge may not lie in the technology itself but in achieving widespread adoption. This has been a pressing issue in 2024, a year marked by record levels of financial crime and escalating fraud cases.
Trust also took centre stage during another panel discussion at Pay360, which focused on the growing role of AI – both as a tool for innovation and a potential avenue for abuse.
AI has been one of the hottest topics in payments throughout 2024, with financial institutions continually discovering new applications for the technology, particularly in fraud prevention and customer support.
However, AI-driven fraud has emerged as one of the fastest-growing threats, as noted by Logan Porter, Director of Solution Engineering at SEON, during his conversation with Payment Expert at the event.
The panel highlighted the need to address consumer concerns around AI. Saira Khan, Head of Innovation and Partnerships at First Direct Bank, explained: “I think it’s hard for you to give you tangible real-time cases for five years down. I think no one knows or has a crystal ball on what’s going to happen, genuinely.
“We need to be responsible. We need to have trust. We need to make sure that we are keeping the customer at the heart of everything that we do.”
If people weren’t already wary of the potential dangers of AI-driven fraud, a panel at the Future Identity Festival in November certainly heightened those concerns.
As mentioned earlier, AI is increasingly being leveraged to commit fraud, and its growing accessibility, coupled with its rapid development, makes it incredibly challenging for institutions to keep pace and warn customers about the risks.
At present, fraudsters are using deepfake emails, phone calls, and messages to trick individuals into sending money to someone pretending to be someone else.
However, Nish Ranatunga, Head of Monitoring and Screening, Group AML at HSBC, cautioned that this is just the beginning and the worst is yet to come.
Ranatunga explained: “A unique type of fraud powered by AI is in the realms of science fiction at this point. The circumvention of bank controls in a unique way is not happening at the moment. However it could be around the corner, so we need to be aware of the threat.”
When it comes to understanding the pulse of payments fraud, there’s perhaps no better event than Financial Crime 360. Payment Expert attended this event towards the end of the year, a year in which the UK has faced significant challenges with fraudsters, often losing many of its battles.
In 2024, Authorised Push Payment (APP) fraud dominated discussions in the payments sector, mainly due to ongoing debates about fraud reimbursement regulations set by the Payments Systems Regulator (PSR).
These rules have been heavily criticised by many financial institutions, particularly the requirement for sending and receiving firms to share reimbursements equally. Initially, the maximum reimbursement was set at £415,000, but following industry lobbying, this was reduced to £80,000.
Despite these adjustments, some are still dissatisfied with the rules, arguing that social media companies are not taking enough responsibility and that the system might encourage fraudsters to make false reimbursement claims.
However, at the Financial Crime 360 event, Tony Craddock, Director General of The Payments Association (TPA), reassured attendees, stating, “The sky didn’t fall in”.
That being said, at the same event, another panel emphasised the need for stronger action against fraud in the UK, stating that ‘the world is watching’.
Nicola Harding, CEO of We Fight Fraud, remarked: “We need to not hold the arrogance that we’ve potentially had about our strength as the kind of financial institutions across the world because they’re looking at us differently, and I think they’re watching.”
This sentiment was echoed by the panel, which concluded that while progress has been made, this is just the beginning. As fraud continues to grow more sophisticated, preventing it will become increasingly difficult in 2025 and beyond.