New Coalition to Combat Economic Crime Announced by CFIT
The Centre for Finance, Innovation and Technology (CFIT) has announced the formation of a new industry coalition to combat economic crime through enhanced verification.
The coalition will unite experts from various sectors, including finance, technology, policy, and academia, to develop solutions for detecting fraud, protecting SMEs, and strengthening defenses against crimes such as Authorised Push Payment (APP) fraud.
Economic crime in the UK is escalating, with nearly £1.2 billion stolen from consumers in 2023. Almost half of this amount (£459.7 million) was due to APP fraud, where victims are deceived into transferring money to scammers for non-existent products or services, like concert and football tickets. With 76% of APP fraud originating online, there were an estimated 232,429 cases last year.
CFIT’s coalition will bring together big tech providers, trade associations, major retail and challenger banks, fintech firms, digital ID solution providers, and credit agencies. The goal is to explore collaborative measures to enhance the UK economy’s resilience against fraud.
The coalition will conduct data-driven research and test solutions to verify the legitimacy and identity of businesses involved in financial services, addressing other security challenges in commerce and payments for UK businesses and consumers. It aims to demonstrate how addressing financial crime will protect businesses and customers from fraud, enable banks and fintech firms to generate efficiency savings, reduce liability, and optimize customer experiences.
This initiative follows the success of CFIT’s inaugural coalition on Open Finance, which showcased the potential of data-sharing technology to improve financial outcomes for UK consumers and provide faster, more effective access to finance for SMEs. The coalition’s ‘proofs of concept’ are now being trialed with Citizens Advice and select retail banks following a successful pilot with HSBC.
CFIT is currently developing the core use cases for its second coalition and will announce the final cohort of partners over the summer. The program of activity will commence immediately, with interim findings expected in Q4 2024 and a final report in early 2025.
Commenting on the new coalition, CFIT’s CEO, Ezechi Britton MBE, said: “Economic crime is a major threat to the UK’s financial security, profoundly impacting consumers and businesses. At CFIT, we are committed to making the financial services industry more robust by uniting top experts to combat this pressing issue. Our goal is to support the incoming government and industry in implementing measures that will make financial services safer and our economy more resilient.”
National Chair of the Federation of Small Businesses, Martin McTague, commented: “Fraud imposes a significant toll on small businesses. It’s crucial to tackle this issue so customers can shop safely online and small firms can trade securely. Any proposed solution must consider the needs of small businesses, ensuring protection and ease of integration into their processes.”
Chris Hayward, Policy Chairman of the City of London Corporation, stated: “Our landmark Vision for Economic Growth report emphasized accelerating digital verification (DV) solutions. I’m pleased to see CFIT continue this momentum with a focus on fraud mitigation. Digital verification can protect businesses and consumers, potentially boosting the UK economy by £4.8bn from 2024 to 2030. As one of CFIT’s co-founders, we support this mission and look forward to collaborating on this important initiative.”
Otto Benz, Director of Payments at Nationwide, added: “Ensuring safe and secure payments and protecting our customers against fraud is vital. We share CFIT’s commitment to digital verification and look forward to working with coalition partners to achieve this.”
Tony Craddock, Director General of The Payments Association, commented: “CFIT’s campaign-led model, which brings together multiple stakeholders to address critical issues, really works. Fraud accounts for 40% of all crime in the UK, and it can’t be prevented without verifying identities using shared data at the point of payment. The Payments Association is excited to participate in CFIT’s next coalition, building on the success of the Open Finance coalition.”