Two financial fraud experts say the Chancellor of the Exchequer, Rachel Reeves, needs to address the growing issue of financial fraud during next week’s Spring Statement. Silvija Krupena, Director of the Financial Intelligence Unit at RedCompass Labs, and Jonathan Frost, Director of Global Advisory at BioCatch, warn that the UK is becoming the fraud capital of the world, and authorities’ tackling of this problem has been ineffective and fragmented.
Before Frost joined BioCatch, he worked in the City of London Police and led the development of the UK National Fraud and Cybercrime Reporting system. Frost says urgent action is needed to reverse the alarming trend of booming financial fraud.
“Recently, it was revealed that scammers from Georgia defrauded savers of $35 million using celebrity deepfakes, with UK citizens bearing the brunt, losing £9 million. It’s clear the Online Safety Bill is failing to protect UK citizens, and we need stronger action,” said Frost. “The UK must adopt a holistic approach that focuses on prevention, not just reimbursement. Banks can’t be the sole line of defence; stronger collaboration across industries and law enforcement is essential to disrupt fraud at its source. Policing must also evolve to tackle digital fraud effectively and co-operate internationally to ensure that offenders are not beyond reach.”
Frost said that fraud is devastating for its victims, impacting both their physical and mental health. A coordinated strategy leveraging cross-industry intelligence and advanced technology is needed to stop scams to protect individuals from the emotional trauma of fraud.
“Without this, banks will remain unfairly burdened and fraudsters will continue to siphon away hundreds of millions.”
Krupena has spent two decades of international work experience in the Financial Sector and leads the development of the RedFlag Accelerator, a comprehensive source of contextual persona-based typologies. Krupen believes the topic of fraud should be at the top of the list of the Spring Statement as it now accounts for almost 49% of all crime.
“While the Online Safety Act was a step in the right direction, it has failed to hold social media giants like Meta accountable for the scams spreading on its platforms. The majority of fraud now originates online, but there are still no meaningful penalties or incentives for tech firms to act.” Krupena explained.
The government must pursue awareness campaigns as well as stronger legislation. There must be AI driven solutions to counter the crisis. Krupen reports that crooks are “leveraging AI to scale fraud operations, sharing successful tactics which automate scams and utilise deepfake technology to rake in millions.”
“It’s time the government matches criminals’ moves and works together with banks, law enforcement, social media firms and financial crime experts to outsmart them at their own game. If not the gap between criminals and those fighting fraud will only widen.”
The UK government has already announced an initiative to reduce bureaucratic red tape which undermines economic growth, while raising costs for everyeont. Krupena said the Chancellor should provide more clarity by outlining the next steps while noting the decision to merge the PSR with the FCA was a good decision.
“For years, banks, fintechs, and regulators have been drowning in red tape, wasting time figuring out whether the PSR or FCA oversees certain rules. The PSR has only added inefficiency, forcing financial services into endless compliance instead of focusing on safeguarding the system. Its rushed APP fraud reimbursement rule created short-term fixes, wasted money, and let criminals stay ahead of regulators,” said Krupena. “Scrapping the PSR is the first step toward real oversight. Less paperwork, less wasted time—let the FCA do its job.
Krupena said this isn’t just about slashing regulation but making it work.
“If the FCA can’t handle the extra workload, that’s a bigger problem. Payment regulation should be sharp and effective, not a bureaucratic maze.”