Payment services and products are always improving.
Customers no longer need to leave a retailer’s website to access a payment option. A merchant doesn’t need to build their money managing infrastructure from scratch anymore. An accountant can automate month-end invoices.
This revolution in services is driven by a few cornerstone technologies that the financial industry has come to rely on; Application Programming Interfaces (API’s), machine learning tools (ML) and AI are at the top of that list.
Whilst we are all familiar with these tools, too often we fail to recognise what unites them. Data.
Yet, while data has increased the speed and convenience of financial flows, it’s also used by fraudsters to launch attacks on an ever-increasing scale. £9.4bn was stolen from consumers and businesses in 2025 alone.
But as with all risks, also come opportunities. While managing money utilises data effectively, in the fight against fraud it is comparatively immature. How data use against fraud matures in the immediate future will determine the next decade of financial innovation.
Speed is a double edged sword
Honest consumers – and honest merchants – take advantage of the increasing speed in our financial system, yet so do criminals.
Because payments settle almost instantly, banks and consumers have smaller windows to protect customers or reverse fraudulent transfers once they are authorised. Criminals exploit this by rapidly moving stolen funds.
The always-on nature of modern payment rails has compounded the problem. Unlike traditional banking systems that operated within business hours and relied on batch processing, faster payments run 24/7, giving criminals more opportunities to strike. Fraud detection systems are needed to make decisions in milliseconds rather than hours.
Convenience for you is convenience for them
The new level of convenience in the payments system means we’re used to selecting, clicking, and paying at the touch of a button. It’s so convenient we no longer need to think about it, and that’s exactly what the fraudsters want.
Traditional digital tactics, such as phishing, are only growing in pace and sophistication as AI enhances creation and scale. The vast amount of apps, subscription services, email sign-ups, and devices means personal data is everywhere, and the attack surface is widening.
Fraudsters have more opportunities than ever to get ahold of your data. It only takes one vulnerability to be exposed. And criminals know how to use it.
Armed with detailed personal information, criminals can impersonate trusted organisations such as banks, suppliers or government bodies, or even family members and friends, to manipulate victims into authorising payments themselves, a tactic commonly known as Authorised Push Payment (APP) fraud.
Payments System Regulator recorded 269,000 reports of consumer APP fraud between Q3 2024 – Q3 2025.
Read More on Fintech : Global Fintech Interview with Rob Young, Managing Director – UK at InDebted
Pitfalls in the protocol
To find a solution, we must first examine the current prevention protocol. Accounts and payments activity are constantly monitored and analysed – a machine and human effort. When activity follows a trend of potential fraud, it’s flagged and dealt with accordingly. However, identification of fraud stays within the walls of each specific institution – there’s no precedent of friendly ‘heads up!’ within financial services.
Within the current process, at least for consumers, remuneration is effective. Government’s Fraud Strategy Report for the next three years accurately describes that, in the event of APP fraud, reimbursement is mandatory, and 88% of fraud victims have been reimbursed.
While customer protections are strong, more work must be done on prevention.
The lack of enforcement in identifying and punishing fraudsters means they are free to move between financial entities. Because these entities don’t share data with each other, fraudsters effectively avoid detection. The future must put as much importance on enabling data for safety as it does for services.
Data sharing to shape the future
Payments providers, banks, regulators, fraud prevention mechanisms, and fintechs must work together.
A data sharing framework, secure and GDPR-compliant, is the place to start. The system should follow strict, regulator-advised protocols and ensure that participation is mandatory in order to access insights. This way, the industry becomes unified. It should be built under a coalition, with payments, fintech, and traditional financial services leading the charge, stating that, through collaborative data-sharing, we’ve entered a new era of fraud prevention.
Collaboration will prove the toughest challenge, though, simply because regulated industries rarely share data between themselves. Collaboration is defined as the operation and maintenance of a synergised fraud system, built on the data and intelligence of all participants. It should be accessible in real-time and provide, to the best of capabilities, insights into the identification of fraud, how it was detected, who is responsible, and how it was resolved.
From here, fraudsters aren’t just detected by a singular firm, but the whole ecosystem. Separate institutions can then prepare their defences accordingly, better equipped to alert customers and strengthen vulnerabilities.
Last, action is needed on multiple fronts. It is not enough to prevent the instance of fraud, fraudsters must learn that consequences follow. This is where evidence collected from the fraud database can be used not only to help identify criminals, but assist the relevant authorities. From here, convictions can increase, ultimately reducing the amount of bad actors. It will also help regulators keep best practices up to date.
Striking the balance
Access to data, easier payment-making, and the harnessing of technologies to bring new products and services to market is in itself a positive force. It makes our lives easier, it opens the flow of commerce, and, by and large, keeps our money and personal information safe.
But we must also accept that the same technologies used to benefit lives can also be used to harm them.
The solution is to take the ways the sector uses technology and data sharing when it comes to products, and use it to create a widespread defense against nefarious actors.
As of right now, we are losing ground to an innovative, global force of fraudsters. However, I believe that by working together, we can be optimistic of significant change.
About Cardaq
Cardaq, is an FCA-authorised electronic money institution offering payments and card issuing/acquiring solutions
Catch more Fintech Insights : Finance as a Feature: The Monetization Shift in Global FinTech Platforms
[To share your insights with us, please write to psen@itechseries.com ]
