UK banks face rising fraud losses as organised crime outpaces them

New research highlights the increasing challenge faced by UK banks as they contend with sophisticated criminal networks and the growing threat of financial crime and the Dark Economy.

A survey of 800 financial crime professionals across 17 countries, published in BioCatch's Dark Economy Survey, reveals that 65% of UK fraud and compliance leaders believe criminal enterprises are now more skilled at laundering money than the banks are at catching them.

The report, titled "Insights into the Invisible: Perspectives on Evolving Fraud and AML Challenges", explores how the Dark Economy—criminal activity designed to move illicit funds linked to human trafficking, drug crime, and terrorism—continues to expand and evolve.

"The Dark Economy is a real phenomenon; it poses a significant threat to banks and their customers," said Jonathan Frost, Director of Global Advisory for EMEA at BioCatch. "Combatting that threat necessitates that banks embrace behaviour to identify risk. However, the fight is far from over; countering organised crime requires that we organise ourselves in a way that enables innovative, real-time collaboration."

The UK banking sector appears particularly proactive in deploying behaviour-based detection technologies. According to the survey, 84% of UK financial crime professionals said their organisations already use behaviour-based analytics to identify fraud, surpassing the global average of 76%.

A majority—57%—of UK respondents expect to increase spending on technology in the coming year. Areas requiring investment, as cited by respondents, include data privacy tools (39%), cybersecurity measures (36%), and strategies to address complex regulatory landscapes (31%).

Despite these investments, UK banks continue to experience notable losses from fraud. 44% of UK respondents reported annual fraud losses of between GBP £8 million and GBP £20 million, a figure significantly higher than the global average of respondents reporting that loss band (26%). Additionally, 11% of UK banks report losses between GBP £20 million and GBP £40 million, while 2% experience losses above GBP £40 million. On a global scale, the most frequent loss reported was within the GBP £4 million to GBP £8 million range, cited by 27% of participants.

Global trends

The findings show that every region surveyed cited year-on-year increases in both attempted fraud and financial losses, with the exception of Asia Pacific. In this region, BioCatch reports that nine of Australia's ten largest banks use its behavioural technology, and the country's five largest banks have joined the BioCatch Trust network—a real-time financial crime intelligence sharing platform designed to protect customers by assessing accounts' trustworthiness during transactions.

The scale of global financial crime is considerable. As referenced in the report, "Nasdaq's Global Financial Crime Report" estimated USD $3.1 trillion in illicit funds moved through the international financial system in 2023.

BioCatch's Director of Global Fraud Intelligence, Thomas Peacock, highlighted the activity and scale of mule accounts—used to launder criminal proceeds—uncovered through its systems in recent years.

"BioCatch customers identified and acted on nearly 2.3 million mule accounts in 2024," BioCatch Director of Global Fraud Intelligence Thomas Peacock said. "Already in 2025, they've detected more than 500,000 such accounts used for laundering money. As these numbers only continue to grow, it's clear criminals are almost certainly laundering money through every major bank on the planet."

Intersection with emerging technologies

The survey found strong consensus among UK financial crime professionals regarding the impact of technology on criminal activity. 84% identified dark web forums, 82% pointed to AI, and 74% cited social media as factors increasing criminal sophistication.

Fraud is also increasingly linked to wider forms of crime. 80% of UK respondents agreed that fraud is tied to other activities such as human trafficking, drug crime, or terrorism.

Collaboration and intelligence sharing

While some progress has been made in collaborative efforts, challenges remain. 46% of UK respondents report sharing intelligence with other banks on a weekly basis, but cited obstacles including privacy regulations (28%), concerns about potential data breaches (25%), and the misuse of information (25%).

Despite these hurdles, the need for greater regulatory intervention was almost universally acknowledged. 89% of respondents said a larger regulatory role is required to address money laundering effectively. Only 13% of UK professionals believe that individual actors pose a greater fraud risk than organised groups.

Other findings from the report highlight that only 18% of global respondents are confident in their ability to identify money mule accounts, and just 19% of UK professionals say that law enforcement is involved in more than half of suspected cases of financial crime.

There remains a sense of cautious optimism at the global level, with 77% of respondents believing that banks worldwide are making progress in the fight against financial crime. However, this drops to 55% when respondents are asked about the impact within their own organisations.

The report notes that 84% of respondents consider addressing the Dark Economy a critical priority for the prevention of financial crime.