Fraud concerns escalate in financial sector

Concerns over fraud have escalated sharply across the UK financial sector, with 68% of firms saying they are more worried about it today than 18 months ago, according to a new report from Dun & Bradstreet.

The data showed that 82% of UK financial services organisations say they are ‘concerned’ about fraud risk, and among those concerned, 72% have increased investment in fraud mitigation over the past 18 months.

Despite this increased investment, a quarter (25%) of firms still admit they feel unprepared to handle fraud risk effectively – highlighting a widening preparedness gap as the threat landscape grows more complex. Almost half (46%) of respondents still rely on largely manual processes to assess and monitor third-party risk, even as the speed, scale, and complexity of today’s risk environment continue to grow.

The survey revealed that 62% struggle with duplicate records, 49% report siloed or disparate data, 35% of firms cited that they have already experienced security breaches due to poor third-party preparedness, whilst 48% of companies are also looking to search engines or AI tools like ChatGPT to fill gaps in their internal data and support risk assessments

Without strong data foundations and automation, financial institutions remain vulnerable to blind spots that undermine their wider resilience.

The report highlights other key areas where firms expressed being ‘concerned’ with Cybersecurity risk worries at 83% of firms. Financial risk is 79%, Reputational risk at 77% and Operational risk at 78%

However, while risks remain complex and organisations feel unprepared for them, awareness and investment across the board are on the rise, with 78% investing in cybersecurity, 63% in ESG and 71% in operational risk. This highlights efforts by firms in the financial services sector to support not only themselves, but to shore up the stability of the broader financial ecosystem.

Sara de la Torre, Head of Banking, Financial Services and Insurance at Dun & Bradstreet UK&I said “The UK’s financial services industry sits at the centre of global finance, and its resilience is essential to the health of the global economy.

“It’s encouraging to see so many firms stepping up investment to combat fraud and other risks, but there is still more to do. To lead on the resilience agenda, firms must strengthen their data foundations and embrace innovation – enabling faster, smarter decisions that protect their business and build long-term confidence across the financial system.”