Pay.UK reports ‘positive results’ from fraud detection pilot

Pay.UK has revealed that a fraud detection and prevention pilot trialled in collaboration with Visa, Synectics Solutions and Featurespace, detected more than £112 million of fraud.

The results of the pilot showed an average 40% uplift in fraud detection at a 5:1 false positive rate which, according to Pay.UK, equates to in excess of £112 million worth of fraud being detected in a year.

Pay.UK’s initiative trialled a new overlay service, which will allow all UK banks and building societies to analyse money flows and use predictive intelligence to “proactively” detect fraud and prevent fraudulent activity from occurring.

Pay.UK, which is the independent, not-for-profit operator of the UK’s national retail payments system including Faster Payments, confirmed the pilot back in June 2023, at which point it contracted industry partners to test the potential benefits of the service with a group of banks and PSPs.

During the three months it ran for, each partner received historic Faster Payments transactional data from participating banks and PSPs under a “pioneering” data-sharing agreement and then independently built machine learning models which identified suspicious activity and compared it to known fraudulent behaviours.

Pay.UK said the results demonstrated that the new overlay service has been successful in detecting fraudulent activity before it occurs, and that it has been designed as a whole market solution that can be adopted by all PSPs.

“The positive results from this pilot demonstrate the importance of innovation and cross-industry collaboration in developing effective solutions to stay ahead of fraudsters and protect people in the ever-changing payments landscape,” said Kate Frankish, chief business development officer and anti-fraud lead at Pay.UK.

“In 2023, the UK saw 232,429 people falling victim to fraud. 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.”

Last month, Pay.UK reported that its account name-checking service Confirmation of Payee (CoP) had reached two billion checks in the UK, since being introduced in 2020.

Mandy Lamb, managing director at Visa UK & Ireland, added: “The UK has one of the most developed payment systems in the world, but also sees some of the highest levels of account-to-account fraud.

“Once fraud happens, the money is in the hands of the criminals so fraud prevention must be our collective goal, in the financial services industry and beyond.”

In Open Banking Expo’s new report, ‘Rising to the Fraud Challenge 2024’ in association with Bottomline, Pay.UK’s Kate Frankish writes about CoP and the fight against fraud. Download the report here.