Cifas CEO Mike Haley Shares Vision for a Fraud-Free Future

The importance of multi-sector data sharing 

For a future of active community engagement in preventing fraud, businesses from all industries should see the value in sharing data across different industries. 

When data is shared, Cifas reports a significant uptick in fraud prevention, helping firms willing to share their data prevent a combined £1.8bn (US$2.29bn) in fraud losses.

“Fraudsters will always gravitate to where the money is and exploit weaknesses – whether that’s in a traditional bank, challenger, EMI or new payments mechanism. To combat those attacks, we must expand our defensive perimeter,” Mike says. 

“We want to make the data filed by our traditional finance members available to fintechs to protect them from fraud and benefit from the insight, intelligence, and innovation from across sectors. Reciprocity is our first principle of membership.”

Fraud challenges in fintech

Of course, one industry where fraud is rife is in the fintech space, with the proliferation of Gen AI providing fraudsters with increasingly sophisticated tools to carry out malicious attacks. 

Earlier this week, we looked at how AI can also lead the charge for fintechs to enhance ID verification practices and prevent fraud. 

Cifas’ CEO reports seeing greater attempts from hackers to circumvent biometric identity factors via AI to access, and take over, customer accounts.

“There’ll likely be more technical attacks at infrastructure using remote access tools and ‘innys’,” he says, “people placed in businesses to bypass security controls or who advertise their insider knowledge. 

“Additionally, fraud-as-a-service will continue to blossom, providing toolkits for less sophisticated criminals to perpetrate mass attacks.

“We also need to find the right balance between security and customer convenience. The two aren’t necessarily contradictory and the use of the right datasets through API call-ups during an onboarding or payment journey can add to security and speed.

“Finally, there’s a challenge to balance the exclusion of bad actors, such as money mules, from the financial system while not excluding the vulnerable or those who have been duped. This is a conundrum yet to be solved.

“Mapping fraud attacks across sectors and determining what data points and intelligence can be deployed at the right time and place to detect risky transactions or bad actors must be done collaboratively.

“It’s critical we share more information between fintechs, social media companies, gambling and crypto, alongside banks. If we create the right frameworks, data flows and safeguards to share real-time risk data, we can defeat fraud.”

Last year, we spoke to Cifas expert and Consultancy Regulatory Solicitor Jeremy Asher, on whether bank fraud detection processes are flawed.