Featurespace and Pay.UK pilot takes scam-busting tech to new heights

The trial has been revealed as a stunning success – since when Featurespace has proved it can save under siege customers even more when scammers strike.

The target of this trial has been Authorised Push Payment fraud – in which victims are manipulated into making real-time payments to fraudsters, typically by social engineering attacks involving impersonation.

Featurespace, an AI-powered fraud and financial crime prevention company, reveals that its proof of concept detected £138.7 million of fraud at a 5:1 false positive ratio.

Utilising its Generative AI solution (Tallier), Featurespace later increased its fraud detection rates to 56 per cent, detecting £180m of fraud, while maintaining a 5:1 false positive ratio. A key part of the solution is that it significantly minimises processing of sensitive data.

Pay.UK is independent, not-for-profit operator of the UK’s national retail payments system including Faster Payments, Bacs and Direct Debit.

The overall pilot exceeded expectations with participants' results showing an average uplift of more than £112m worth of additional fraud detected in a year. Featurespace significantly outperformed this average, achieving an uplift of £138.7m (43 per cent of the missed fraud from incumbent fraud systems) at a 5:1 false positive ratio (within the data received).

The initiative trialled a new overlay service which will allow all UK banks, building societies, and payment service providers to analyse money flows, utilising Featurespace's adaptive behavioural analytics to proactively detect fraud and help prevent crime before it occurs, safely and securely.

Cases of APP fraud jumped by 12 per cent from 2022 to 2023, with total losses amounting to £459.7m.

Featurespace analysed data from participating banks, building societies, and payment service providers under a UK-first data-sharing agreement enabling Pay.UK's ‘consortium’ model within its ARIC platform.

Kate Frankish, Chief Business Development Officer and Anti-Fraud Lead at Pay.UK, was impressed, commenting: "The positive results from this pilot demonstrate the importance of innovation and cross-industry collaboration in developing effective solutions to stay ahead of fraudsters and protect people in the ever-changing payments landscape.

"In 2023, the UK saw 232,429 people falling victim to fraud. To reduce the scale of the crime that is happening we need a unified approach, and this future service will be a major step forward.”

Martina King, CEO at Featurespace, added: “Fraud is the single largest crime in the UK. It accounts for 40 per cent of all crime and contributes to £2.3 billion in losses annually.

"But the UK is leading the charge to tackle this issue and the game-changing pilot with Pay.UK is one that the world has been watching. It shows the immense power of collaboration and technology and the scale of positive change that is possible when the payments industry works together to tackle fraudulent activity.”

A key part of Featurespace’s solution is that it significantly minimises processing of sensitive data. Data privacy and security has been a core focus for Pay.UK, which has spent almost a year working closely with banks, building societies, PSPs, suppliers, and specialist legal counsel to ensure that all data is processed securely and legitimately within a strict scope of use.