The hidden cost of disconnected risk
Compliance teams have more risk data than ever, yet siloed systems are creating dangerous blind spots in financial crime detection.
The question facing compliance leaders is no longer “Do we have the data?” but “Is our data producing actionable intelligence?” In the race to combat financial crime and expand into new markets, enterprises have invested in layered detection tools. The unintended consequence is siloed systems that produce fragmented intelligence and inconsistent decisions.
Our State of Financial Crime 2026 research found that surveyed financial firms identified siloed datasets as the third-most-common limitation in financial crime detection. On average, organisations use seven different systems for compliance activities. So perhaps unsurprisingly, 99% of respondents see benefits in having a single integrated platform. The gap between what firms have and what they need is significant.
The decision gap
Significant risk management challenges emerge when KYC, AML and fraud teams hold incomplete pictures of the same customer. Analysts chase noise in one system while genuine risk develops in another. A customer cleared at onboarding can become a serious liability, not because the warning signs weren’t there, but because they were scattered across systems no single analyst could see at once.
In high-growth enterprises, this fragmentation creates a velocity trap. A surge of new customers triggers a flood of alerts that disconnected systems cannot resolve automatically. Revenue-critical processes, such as
From stolen identities to hijacked accounts: How AI is reshaping fraud in the UK
Imagine waking up to find your identity has been stolen – not just bank details, but your entire digital footprint, cloned by AI to apply for loans, mortgages or even jobs in your name.
This isn’t a dystopian future. It’s already happening.
Fraud accounts for 45% of all crime across England and Wales 1 , costing our economy a staggering £219 billion 2 annually. Last year, Cifas members filed over 444,000 fraud cases to the National Fraud Database (NFD). Identity fraud and facility takeover – where criminals hijack accounts – made up 72% of those cases. And in just the first half of 2025, £600 million was stolen from UK banks, with APP fraud losses up 12% to £257.5 million. 3
Impacts of fraud
Behind every statistic is a real person – someone who’s had their life savings stolen, a small business
onboarding and payment approvals, grind to a halt. The faster you try to grow, the more friction your systems create.
A global regulatory shift
Regulators are now scrutinising your decision logic. Singapore’s Monetary Authority requires firms to explain the reasoning behind algorithmic decisions under its FEAT principles. The EU AI Act pushes for transparency across a whole range of model use cases. Australia’s APRA expects documented AI governance and auditable decision outcomes, proportionate to risk.
Accountability for decisions becomes tricky to manage when the data fuelling it sits in an inaccessible silo. Explainability and robust audit trails have moved beyond best practice to becoming a legal standard.
From fragmentation to orchestration
The optimal state for compliance frameworks demands a unified decision chain where every action is documented, every signal connected and every decision defensible under regulatory scrutiny.
What was previously tolerated is now a liability: inconsistent decisions masked by data volume, signals that never connect across systems. Consolidated risk infrastructure protects your enterprise and, critically, enables you to onboard faster, enter new markets and scale without the friction of manual reconciliation.
pushed to the brink or a vulnerable individual manipulated. Fraud doesn’t solely drain wallets; it erodes trust in our digital economy. For businesses, the impact goes beyond direct losses. Fraud drives operational cost, increases regulatory and compliance pressures, strains customer-facing teams and poses material reputational risk. As digital services become the default channel for engagement, sustained fraud threats erode confidence in identity, payments and communication systems that underpin growth and innovation. Against this backdrop, prevention is critical. In 2025, Cifas members prevented more than £2.4 billion in fraud losses, a 14% increase on the
previous year and the highest figure ever recorded. This demonstrates the value of trusted data sharing and cross sector collaboration in reducing harm before it occurs.
Evolving nature of fraud
The nature of fraud is also evolving rapidly. Four out of five scams are digitally enabled, with criminals exploiting the same technologies that support productivity and economic growth. Organised criminal groups operate at scale across borders, increasingly using automation and AI to generate convincing fake documents, impersonate individuals and accelerate attacks faster than traditional controls can respond. This is why sharing data and intelligence across industries and borders is vital. It’s up to us to seize this moment and close the gaps fraudsters exploit and protect people and economies effectively.
References:
1. Home Office & The Rt Hon Lord Hanson of Flint. (2026). Fraud Strategy launch. https://tinyurl. com/4tbj9dtw.
2. Crowe. (2023). Annual Fraud Indicator. https:// tinyurl.com/29c8cysb.
3. UK Finance. Over £600 million stolen by fraudsters in first half of 2025. https://tinyurl.com/3d5233t4.
WRITTEN BY
Iain Armstrong
WRITTEN BY
Mike Haley CEO, Cifas