Welcome to The FinCrime Connection, where we unpack the most significant stories in financial crime. This month, we spotlight three key developments shaping the UK’s financial crime landscape. From new FCA expectations to staggering fraud statistics and scam reimbursement insights, these are the updates every financial crime professional should know.
Story 1: FCA Links Financial Crime Controls with Consumer Duty
The UK’s Financial Conduct Authority (FCA) has updated its Financial Crime Guide, embedding a direct connection between financial crime prevention and the Consumer Duty.
What’s New?
The FCA now explicitly states that firms must consider Consumer Duty obligations when designing and implementing financial crime controls. This includes:
- Rethinking transaction monitoring (TM) and fraud alerting—not just minimising false positives, but focusing on actual risk
- Encouraging innovation in detection approaches, provided firms can ensure explainability, testing, and governance, especially for AI and machine learning
- Strengthening oversight and continually evaluating TM effectiveness
What This Means for Financial Institutions
The message is clear: the FCA wants firms to look beyond mere compliance and focus on customer outcomes. Key actions to consider:
- Align your financial crime framework with Consumer Duty objectives
- Ensure risk-based TM is dynamic and responsive
- Implement governance structures that can clearly evidence decision-making and explainability, particularly for automated solutions
This shift signals a maturing regulatory environment where financial crime controls must work hand-in-hand with customer protection principles.
Story 2: CIFAS Fraudscape Reveals Record-Breaking Fraud Figures
The latest CIFAS Fraudscape Report paints a stark picture of fraud in the UK, with over 421,000 cases filed to the National Fraud Database in 2024—a 13% year-on-year increase.
Key Findings
- A new fraud case is recorded every two minutes
- Impersonation fraud makes up 59% of all reports, mostly driven by online channels
- Money mule cases appear to have decreased, though likely due to firms exercising greater caution when reporting young people, amid regulatory concerns.
- Despite the overall reduction however, some firms have seen big increases in mule activity, and are reporting mule activity as being relentless.
- Facility takeover fraud surged 76%, with more than 74,000 cases—almost half involving the telecoms sector via SIM swap attacks
Why It Matters
These figures confirm the relentless pace of digital crime and fraud evolution. Financial institutions should:
- Re-evaluate their fraud typologies, especially in relation to digital impersonation and SIM swap trends
- Work closely with telecoms providers and security partners to identify and mitigate takeover risks
- Monitor mule account trends and ensure reporting practices reflect the latest regulatory guidance
Fraud continues to grow in scale and sophistication. Financial crime teams must remain agile and proactive in updating controls.
Read the full CIFAS Fraudscape report
Story 3: Early Insights from APP Scam Reimbursement Reforms
Seven months into the Payment Systems Regulator’s (PSR) new APP scam reimbursement rules, an initial update reveals promising signs.
The Headlines
- A high proportion of APP scam claims are now consistently reimbursed across providers
- Only 2% of claims have been rejected due to customer negligence
- Contrary to fears, there’s no significant increase in APP scam volumes post-implementation
- Early data even suggests a potential decrease in APP scam reporting for the first quarter of 2025
What This Signals
The new rules appear to be achieving their aim: protecting victims without triggering a surge in opportunistic fraud. For financial institutions, this means:
- Continuing to build robust fraud education and victim support pathways
- Ensuring reimbursement processes are fair, transparent, and well-documented
- Monitoring scam typologies for shifts as fraudsters adapt to the new rules
While it’s still early days, the positive trajectory offers hope that industry and regulation can work together to reduce the impact of scams.
Stay Vigilant. Stay Connected.
This month’s stories underline the need for ongoing innovation, strong governance, and holistic customer protection in the fight against financial crime. From evolving fraud risks to shifting regulatory expectations, the landscape continues to change at pace.
Join us next month for more insights from The FinCrime Connection, brought to you by Jade ThirdEye.
This blog is based on the May episode of The FinCrime Connection, hosted by Claire Rees and Chris Holmes from Jade ThirdEye. Claire brings over 20 years of financial crime expertise from her experience in financial services, while Chris is our UK Manager supporting Jade ThirdEye Clients in the UK since its inception in 2012, providing hands-on support and strategic guidance to help firms strengthen their financial crime controls.