Open Banking Fraud Rates Fall Below Industry Average Despite Rise in Sophisticated Scams

Fraud rates within the UK's open banking system remain significantly lower than the wider financial industry average, according to new data released by the sector's oversight body. The findings, covering March 2024 to September 2025, show open banking fraud accounting for just 0.013% of transactions by volume and 0.020% by value in the first half of 2025—well below industry averages of 0.045% and 0.027% respectively.

Despite this positive trend, the research identifies a concerning shift towards more sophisticated scams, particularly authorised push payment (APP) fraud, which now represents 74% of all open banking fraud cases. These developments highlight evolving challenges as criminals increasingly employ artificial intelligence to target victims.

Background and Context

Open banking, which enables regulated third-party providers to access customer banking data through secure APIs, has expanded rapidly across the UK financial landscape. The technology allows consumers and businesses to share financial information securely with authorised apps and services, potentially increasing competition and innovation in financial services.

While the sector's fraud rates have decreased year-on-year, the latest report reveals that industry-wide fraud has increased over the same period. This divergence suggests that open banking's security measures and collaborative approach to fraud prevention may be proving effective, even as criminal methods become more sophisticated.

Key Figures and Entities

Open Banking Limited (OBL), the organisation tasked with setting standards and overseeing the UK's open banking implementation, compiled the data from across its participant network. Christian Delesalle, Head of Participant Support at OBL, noted that while the increase in APP fraud is concerning, it reflects a sector-wide challenge rather than an open banking-specific vulnerability.

"Open banking remains resilient against fraud, with rates consistently below industry benchmarks," Delesalle stated in an accompanying release. "Our data-driven approach and industry partnerships are key to maintaining robust defences as adoption grows."

Legal and Financial Mechanisms

Authorised push payment scams, which involve manipulating individuals or businesses into voluntarily transferring funds to fraudsters, have become the primary threat vector. These schemes often employ social engineering tactics, with criminals impersonating legitimate organisations or authorities to deceive victims.

The report highlights an emerging trend of criminal organisations using artificial intelligence to enhance their fraudulent activities, including generating more convincing communications and identifying vulnerable targets. This technological escalation in criminal methods presents new challenges for detection and prevention systems across the financial sector.

International Implications and Policy Response

The findings have implications beyond the UK market, as other jurisdictions develop their own open banking frameworks. The relatively low fraud rates in the UK system could provide a model for international best practices, particularly regarding industry collaboration and data-sharing protocols.

However, the rise in sophisticated APP scams underscores the need for continued regulatory attention to consumer protection measures. Financial regulators across Europe and globally are grappling with how to balance innovation in payment services with adequate safeguards against evolving fraud tactics.

Sources

This report draws on the Financial Crime in Open Banking 2025 Update published by Open Banking Limited, analyzing transaction data from March 2024 to September 2025. The full report includes detailed methodology and comparative analysis with broader industry fraud statistics.