Grant MacDonald, Director of Financial Crime at Experian
Fraud and financial crime continue to pose a serious challenge to UK businesses in 2025. From banks and fintech’s to retailers and telecoms, organisations are under pressure to outpace increasingly sophisticated threats. According to the Experian UK Fraud and FinCrime Report 2025, only one in ten businesses plan to reduce their fraud and compliance budgets this year, with most preparing to increase investment in prevention and detection.
The scale of the problem is undeniable. In 2024, the National Fraud Database recorded a record-breaking 421,000 cases, a 13% year-on-year rise and the largest increase to date. Meanwhile, 59% of businesses reported rising fraud losses. Generative AI is accelerating this trend, enabling more advanced identity fraud, account takeovers, and synthetic identity creation. In Q1 2025 alone, 35% of businesses reported AI-related fraud attempts, up from 23% the previous year.
Traditional threats like APP scams, SIM swap fraud, and first-party fraud also remain prevalent. In response, businesses are evolving their strategies, investing in smarter technologies, refining internal processes, and aligning fraud and compliance functions more closely.
Drawing on insights from the Experian UK Fraud and FinCrime Report 2025 and discussions at Credit Week, here are five key trends shaping the year ahead:
1. Leveraging AI and machine learning for smarter detection
AI is now central to both the threat and the solution. While fraudsters are using GenAI to craft more convincing scams, businesses are deploying AI to enhance detection. Over half (52%) of UK firms are upgrading their AI analytics, and 51% are building new models to improve decision-making and reduce false positives.
This reflects a broader shift away from static, rule-based systems toward more adaptive, data-driven approaches. These systems can analyse large volumes of transactions in real time, identify unusual patterns, and adjust to emerging threats. For businesses, this means being able to respond more quickly and accurately to fraud risks.
2. Reinforcing authentication to combat SIM swap fraud
SIM swap fraud has become a growing concern, with reported cases increasing by over 1,000% in 2024. This type of fraud allows criminals to take control of a victim’s mobile number and intercept one-time passcodes, giving them access to sensitive accounts and services.
To address this, businesses are reviewing their authentication strategies. Many are moving beyond SMS-based two-factor authentication and adopting more robust, multi-layered approaches. This includes the use of physical and behavioural biometrics, device intelligence, and knowledge-based authentication. These methods offer greater resilience against evolving threats and help protect both customers and systems.
3. Tackling first-party and synthetic identity fraud
First-party fraud has re-emerged as a major concern, especially with new APP scam reimbursement rules. At the same time, synthetic identity fraud continues to pose a significant challenge, with estimated losses exceeding £300 million annually for UK financial institutions.
To counter this, 60% of businesses are investing in synthetic identity detection, and 55% are increasing budgets in this area. Advanced identity verification tools that blend behavioural and traditional data are helping firms detect inconsistencies and reduce onboarding risks.
4. Integrating fraud and AML operations for greater efficiency
More organisations are integrating fraud and anti-money laundering (AML) functions into unified FRAML operations. In 2025, 60% of businesses are taking this approach to improve data sharing, streamline responses, and enhance detection.
Additionally, 65% of businesses are investing in detecting financial crime risks at the onboarding stage. By identifying risks earlier in the customer lifecycle, organisations can reduce downstream costs and improve the overall effectiveness of their financial crime prevention strategies.
5. Meeting evolving consumer expectations
Consumer concerns about online fraud are shifting, with Gen Z and Millennials now more worried than older generations. Their top concerns include privacy, misinformation, and misuse of personal data, especially in the age of AI.
Businesses are responding by prioritising transparency, security, and user experience. While 84% aim to reduce customer friction, they also recognise the need for visible, effective fraud controls. Striking the right balance will be key to building trust in a digital-first world.
To stay ahead of the curve, UK businesses must act now investing in smarter technologies, unifying fraud and compliance efforts, and aligning with evolving consumer expectations. Those who lead on fraud resilience in 2025 will be the ones who earn trust, reduce risk, and drive long-term growth. Achieving this requires a layered approach, combining multiple technologies and capabilities to detect and respond to emerging threats with agility and precision.
