Reports of savings accounts being ‘used to receive fraudulent or disputed funds’ increased by 63 per cent last year, compared to a 12 per cent increase in current accounts, according to tech firm Synectics Solutions.
The ‘State of Fraud 2025: Banks and Building Societies‘ report delves into an analysis of National SIRA, the UK’s largest source of evolving risk intelligence, which is owned and operated by Synectics and sourced from over 150 UK financial institutions organisations, including Tier 1, mid-size, and challenger banks, alongside leading building societies.
While current accounts still see the biggest volume of such activity, the growth in fraudulent use of savings accounts suggests that money launderers and their mules are attempting to disperse activity across a wider range of financial products as part of their networks. The data also indicates that fraudsters are increasingly bypassing onboarding processes.
Liese Rushton, fraud strategy consultant at Synectics, commented: “Post-PSR Mandatory Reimbursement, mules and their herders faced a tactical tipping point. Knowing that account providers would likely scrutinise more transactions across more products (with many focusing on predicting risk using mule-specific AI algorithms), launderers appear to be dispersing their targets.
“It’s clear that long term customer monitoring that leverages real time fraud intelligence, is increasingly necessary to detect the moment ‘good customers’ turn bad.”
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According to the data, ID fraud is the main ‘growth fraud typology’ in the UK at this time. Reasons for fraud filings linked to this category include addresses not matching with provided identities, multiple applications using the same address, and the use of false identities – including suspected and confirmed cases of artificially created ‘synthetic IDs’.
Chris Lewis, head of solutions at Synectics, also added: “There’s been a 25 per cent increase in false identity reports, this growth almost certainly linked to increased adoption of AI tools by fraudsters – tools which make light work of creating synthetic identities and manipulating genuine ones. We predicted the rise of synthetic IDs in 2023 and see their use in full force today.”
While the increase in reported ID fraud may be alarming, it is also indicative that evolving fraud detection tactics are working.
Chris added: “Encouragingly, banks and building societies are intercepting more identity fraud. However, as image and video manipulation advance, fraudsters will keep investing in these tactics. Organisations must stay vigilant, adopting ID verification that moves from 2+2 checks to using diverse digital evidence to confirm someone is and lives where claimed.”
The report examines credit card fraud, application fraud, and mortgage fraud – with data across all three indicating that the cost-of-living crisis remains a critical factor in UK fraud rates.
Jordan Roberts, fraud strategy consultant at Synectics, explains: “Pressures connected to the cost-of-living crisis may potentially influence an individual’s decisions regarding fraud and financial risk taking.”
