Here’s how the UK government could curb fraud using technology

By Puja Sharma

According to the House of Commons Justice Committee, the fraud epidemic is sweeping England and Wales at the moment. Online fraud now accounts for 40% of all crimes, and another 25% growth is expected in these crimes in the next few years if no major changes are made to the way they are investigated, prosecuted, and prevented

Fraud is a crime that can have profound impacts on an individual, not only causing financial losses but emotional and psychological distress. It is difficult for victims of fraud to report their crimes and for those who most need it to receive specialist victim support. The dedicated reporting system for fraud, Action Fraud, is due to be replaced in 2024. It is crucial that this replacement does not just bring about improvements to reporting mechanisms and subsequent investigations, but also embeds a system that directs victims to appropriate support and keeps them updated on the next steps in their case

Martin Wilson, CEO of OneID, said: “The UK, now more than ever, needs the government to make fraud a priority. Most offenses of fraud are committed online, with one of the fastest growing types of fraud being authorised push payments fraud, where people are tricked into sending money directly to criminals. This not only causes financial strain it also has a deep emotional impact as people are left feeling foolish for falling for fraudsters’ tricks. At the heart of this type of fraud is fraudsters creating unverified identities or stealing people’s real identities before swindling money from unsuspecting victims.

“Banks have invested heavily in their security measures such as strong customer authentication and have prevented a large amount of fraud, but they are losing vast amounts of money.

“The key to the fight against fraud will be preventing people from becoming victims of these crimes in the first place. To tackle this, we need the government and the banks to work together to verify the identity of people on both ends of a transaction before money changes hands. Such a system exists in other countries across Europe and has helped reduce fraud dramatically – it’s time for the UK to catch up.”

Several key areas can be accelerated through the use of technology to identify fraud:

Creating a solid data foundation – To maintain the integrity of the register, you need to join multiple datasets to get a full picture of each individual or company. Data-matching techniques that use traditional methods struggle to scale and are ineffective. A single view of an organisation’s company data can be created using Entity Resolution by unifying internal and external data (such as Company House data) and overcoming data-quality issues, as per the Quantexa report on technology and fraud.

Equipping operators with network analytics technologies – To move to a gatekeeper role, technology will need to be deployed for assessing individuals and organizations trying to join. Identifying hidden threats and connections can be accomplished through Network Analytics, which makes sense of massive datasets from the internal and external worlds. A holistic network shape is used instead of a single-registry filing to detect shell companies more rapidly.

Extending state powers must be enabled by technology that delivers information ethically and openly. Technology must be built on open standards and contain fully auditable components so that every time it is applied, the results can be fully audited, ethical, and transparent. The ability to explain is crucial to supporting internal teams and external regulators, as well as building confidence among stakeholders.

Key findings:

• Fraud now accounts for 40% of all crimes in England and Wales
• A Large number of fraud offenses enabled through online methods, including social media and email
• There is a lack of expertise among front-line officers in identifying fraud
•   The government and the banks to work together to verify the identity of people on both ends of a transaction before money changes hands
• Several key areas can be accelerated through the use of technology to identify fraud