Thank you Lord Mayor for those opening words, and for generously hosting this morning’s event in such an impressive venue.
I am delighted to be here today and particularly glad to see such strong representation from the financial sector. In this room are senior figures from world-leading banks, law enforcement and government. The chief executives of some of the biggest banks and payment providers in the world, responsible for countless transactions, worth millions of pounds, every second. And we are joined by those responsible for regulating and stewarding the financial system – Mark Carney, the Governor of the Bank of England, and Tracey McDermott, Acting Chief Executive of the Financial Conduct Authority, and Harriett Baldwin, the Economic Secretary to the Treasury.
Together the people in this room are responsible for one of the great engines of our economy and an incredible creator of jobs, wealth and economic power in this country – the financial services industry. It is the reason that London is the world’s pre-eminent financial centre and a hub for the global exchange of currency, capital and shares.
Our economy relies on the financial system and everyone in this country benefits from its global success. But the scale and volume of financial activity also brings serious risks of economic crime and real opportunities for criminals to defraud hardworking taxpayers and vulnerable pensioners of their savings and earnings.
Fraud shames our financial system. It undermines the credibility of the economy, ruins businesses and causes untold distress to people of all walks of life. Some of you will know first-hand the financial and emotional impact of being defrauded, and the industry leaders in the room will know the true financial cost of fraud to their businesses, from reimbursing consumers to repairing your reputations with affected clients. But for too long, there has been too little understanding of the problem and too great a reluctance to take steps to tackle it.
Last year, the Office for National Statistics estimated that there were 5.1 million frauds in the UK. The City of London’s size and openness to global trade makes it particularly exposed to the risk of international money laundering and the frauds that are inevitably linked to it.
And it is clear that fraud is often coordinated by organised criminal gangs, increasingly using online channels to dupe unwitting individuals and access their accounts. There is growing evidence they do so from jurisdictions out of reach of traditional policing, using technology that make them difficult to investigate. And we know that individuals travelling to join Daesh in Syria have used frauds to fund their travel. In one successful prosecution, a group linked to a terrorist investigation was found to have defrauded or attempted to defraud elderly and vulnerable victims of a total in excess of £1 million.
So I am delighted that we are joined by those leading the law enforcement response –Ian Dyson, the new Commissioner of the City of London Police and Lynne Owens, the new Director General of the National Crime Agency.
So everyone in this room has an interest in stamping fraud out and disrupting the criminals that lie behind it. Fraud is not and never has been a victimless crime and its impact is much wider than is commonly recognised.
That is why today is so important. It represents a united front of government, law enforcement and industry in preventing, identifying and cracking down on fraud.
A unified front against fraud
Today’s event builds on some excellent joint working across the financial sector and law enforcement to tackle fraudsters. Many of the banks and card companies in this room, and more broadly, are investing heavily in increasingly sophisticated security systems to detect and prevent fraud. Industry has funded the Dedicated Card and Payments Crime Unit, where police work alongside professional fraud investigators to disrupt fraudsters and gather evidence to secure convictions. And the National Fraud Intelligence Bureau, operated by the City of London Police, helps identify established and emerging frauds and those who are committing them.
At the same time, the Home Office and law enforcement offer targeted prevention advice through sources such as Cyber Streetwise and GetSafeOnline to encourage individuals and businesses to adopt safer behaviours to protect against fraudulent activity.
But as everyone in this room knows, we need to go further. New technology is facilitating new ways to commit cyber crime and to defraud members of the public. Organised criminals are becoming more sophisticated in their actions and “buying in” expertise to mount increasingly complex frauds that can wipe millions off the value of accounts at a keystroke. Even public sector institutions are attractive to fraudsters, who either attempt to hack databases or impersonate institutions to defraud people and businesses. Quite simply, we are not making up enough ground on the criminals and people’s livelihoods are at risk.
The Joint Fraud Taskforce
So today, I am delighted to officially launch the Joint Fraud Taskforce, which will bring the collective powers, systems and resources of banks, payment providers, police, wider law enforcement and regulators to bear on this threat.
We will achieve this in a number of ways. First, we must build a better understanding of the threat. So we will bring together expert knowledge from each Taskforce member to identify and map key threats, vulnerabilities and drivers of fraud. This greater understanding will ensure that the activities of the Taskforce can be clearly focussed on areas that can and should be tackled.
We must concentrate efforts to improve our collective response on fraud. This means focusing on targeting high harm nominals and improving fast-track intelligence sharing between banks and law enforcement. It is only by systematically sharing information and data between banks and law enforcement investigators that we will be able to identify suspicious financial flows, track fraudulent funds through the system, and prove fraudsters are profiting from such illegal activity to support convictions.
We will focus the Taskforce efforts on victims too. By better data sharing and matching we hope to speed up the identification of victims and potential victims and address the barriers preventing the refund of funds to scam victims. And this work cannot just be digital in scope, with closer cooperation between bank staff and the police to identify potential victims when they present themselves in branch too.
Finally, the Taskforce will identify and tackle the vulnerabilities that the fraudsters depend on to successfully target the public and businesses. These are often simple fixes that can have big results, like our work with telephone providers to reduce the amount of time a telephone line stays open after one person has dialled, closing a loophole which criminals used to pretend to be from a bank or other legitimate organisation. Or they can be innovative technical solutions, such as the development of Chip-and-Pin introduced in 2006 to tackle specific types of card fraud. Since its introduction, counterfeit card fraud has dropped 72% since it peaked in 2008, and fraud losses on the UK high street have fallen 78 % since 2004.
A true partnership between industry, law enforcement and government
I want the Joint Fraud Taskforce to signal a new type of partnership - truly collaborative, driving our collective action to reduce the numbers of victims; reduce the impact of fraud; and increase the prosecution and disruption of fraudsters.
And I will do everything I can to ensure it is a success.
But if the taskforce is to achieve everything it needs to, I need your support. The Taskforce can only work if there is genuine collective ownership and commitment from everyone in this room.
So my ask is simple – lend your expertise to this new body. Come forward to lead specific work. Encourage your brightest and best to offer their leadership and expertise. Join your intelligence teams, your data experts, and your customer care teams with law enforcement to improve the response to fraud. The Taskforce will be open and transparent, the public will hear of its successes, your businesses will be less at risk of fraud, and your customers will know that you have been part of something truly worthwhile.
We know this approach works. Some of you will know that we launched the Joint Money Laundering Intelligence Taskforce last year. That Taskforce has already had an impact through its collaborative approach to tackling the increasing threat from serious and organised crime groups involved in high-end money laundering. Working together, members of that taskforce have developed cases, identified and closed banks accounts, issued alerts on methodologies, obtained 50 new court orders and made 8 arrests.
It is a clear demonstration of what can be achieved in a relatively short space of time when the industry, law enforcement and government come together with a common aim.
We are going to hear shortly from representatives in banking and law enforcement who have already recognised the importance of the Joint Fraud Taskforce and become actively involved. They have committed their organisations to supporting its work, bringing knowledge, expertise and fresh new thinking to the table. I cannot stress enough how valuable this collective work is, and I urge you to make the decision to get involved.
Thank you again for taking time to be here this morning and I look forward to listening to the other speakers, and I would like to invite Mark Carney, Governor of the Bank of England to say a few words.