UK Banks Demand Tech Accountability as Fraud Losses Surge to £629M
A surge in fraud losses totaling £629.3 million in the first half of 2025 has exposed a critical accountability gap between technology platforms and financial institutions in the UK's fight against economic crime. The unprecedented figure, revealed by UK Finance at the 2025 Economic Crime Congress, represents a three per cent year-on-year increase and highlights how criminals are exploiting regulatory disparities between sectors.
Background and Context
The UK's financial crime landscape has reached what industry leaders describe as a "critical tipping point," with fraud now accounting for more than 40% of all crime in the country. While financial institutions invest approximately £38 billion annually in compliance measures—primarily driven by anti-money laundering requirements—most fraudulent activity originates on social media and telecommunications platforms rather than within banking systems.
According to UK Finance, this creates an unsustainable imbalance where banks bear the financial and regulatory burden for scams that begin outside their ecosystem. The organization's representatives warned at the Economic Crime Congress that without meaningful cooperation from technology companies, the current structure is no longer tenable.
Key Figures and Entities
UK Finance, the trade association representing the UK banking sector, has emerged as a leading voice calling for technology platform accountability. Their research indicates that the vast majority of fraud now begins on social media and telecom platforms, where criminals cultivate victims before any payment is requested.
Industry experts like Perttu Nihti, Chief Product and Technology Officer of Basware, have highlighted how generative AI is accelerating fraud attempts. Basware's research shows that 62% of businesses now cite generative AI as a key driver behind the surge in invoice fraud attempts, with 90% of organizations lacking adequate technological defenses.
Legal and Financial Mechanisms
The current regulatory framework places financial institutions in the position of being the last line of defense against fraud. Banks face mandatory reimbursement obligations for Authorized Push Payment (APP) fraud, regardless of where the deception began. This regulatory burden has funneled the industry's compliance spending—approximately £38 billion annually—primarily toward anti-money laundering measures rather than preventative fraud detection.
Industry leaders are now calling for three core changes: stronger identity verification controls on user onboarding across platforms, enhanced legal frameworks for real-time threat intelligence sharing between sectors, and the establishment of regulatory frameworks that impose comparable accountability on technology platforms that host initial scam activities.
International Implications and Policy Response
The accountability gap between technology platforms and financial institutions has broader implications for the integrity of the transatlantic digital economy. UK Finance representatives have emphasized that the effectiveness of the UK's fraud response—and by extension the economic relationship between UK and US businesses—depends on meaningful collaboration from global technology companies.
The rapid evolution of AI-powered fraud tools, including deepfakes and manipulated documents, has exposed vulnerabilities in traditional manual financial processes. Lawmakers and enforcement agencies are now demanding regulatory changes that would place preventative obligations at the point of origin rather than expecting financial institutions to bear the entire cost burden.
Sources
This report draws on information presented at the 2025 Economic Crime Congress by UK Finance, research from Basware on AI-driven fraud trends, and industry analysis of the regulatory framework governing financial crime prevention in the United Kingdom.
