Pay.UK has reported that a pilot program focused on fraud detection, conducted in collaboration with Visa, has exceeded expectations and could potentially save the UK economy over £112 million annually.
APP (Authorized Push Payment) fraud has emerged as a critical issue in the UK, with losses reaching approximately £500 million last year. Pay.UK, responsible for the UK’s national retail payments system, undertook a three-month pilot with Visa, Synectics Solutions, Featurespace, and a group of banks and payment service providers (PSPs).
The initiative tested a new overlay service intended to enable all UK banks and building societies to analyze cash flows and utilize predictive intelligence for fraud detection, aiming to prevent criminal activities before they happen.
Technology partners accessed historical Faster Payments transactional data from participating banks and PSPs through a data-sharing agreement. Each partner independently developed machine learning models to identify suspicious activities and compare them with known fraudulent behaviors.
The pilot demonstrated an average 40% improvement in fraud detection, accompanied by a 5:1 false positive rate, projecting over £112 million in detected fraud within a year. Visa reported that its AI tool identified an additional 54% of fraud and APP scams that went unnoticed by banks’ prevention systems. The company asserts that its real-time fraud detection service could potentially save the UK economy more than £330 million annually.
Pay.UK emphasizes that the tool is designed for adoption by all PSPs. Kate Frankish, Chief Business Development Officer and Anti-Fraud Lead at Pay.UK, remarked, "In 2023, 232,429 individuals fell victim to fraud in the UK. To diminish the scale of this crime, we need a unified approach, and this forthcoming service represents a significant advancement."
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