In order to prevent cybersecurity attacks, U.K. banks are going to have to take chances investing in new technologies at a time when the banks are spending more than the country’s prison system is spending to fight crime.
According to Bloomberg, Megan Butler, director of supervision at the Financial Conduct Authority (FCA), said that banks have been wary of rolling out the latest technology to fight money laundering and fraud because they are afraid they will be punished by regulators if the new systems fail to identify any illegal activity.
“Financial institutions are judged by the public on their ability to combat crime – not their spend doing it,” she said, according to the text of a speech she gave in London. Butler said the FCA is concerned with the outcomes of the investments, not how much the companies are spending. She noted that the banks next will need to use artificial intelligence, robotics, natural language processing and machine learning to identify potentially suspicious transactions.
Bloomberg, citing a survey from the FCA, noted that in a year’s time, banks turned away more than one million potential customers because of concerns over crime. The FCA found much of the financial lawbreaking to be happening online, with cybercrime accounting for close to half of U.K. crimes. The FCA said U.K. banks spend around $6.7 billion each year fighting financial crimes, which is more than the budget of its national prison system.
Butler said cybercrimes are rapidly increasing their focus on identity theft, phishing and malware attacks. “Staff in U.K. financial services are playing a front-line role in combating crime,” Butler said.
The crime update comes as the FCA is facing outrage from former small business owners who have complained about being mistreated by big banks. According to Reuters, during questioning from the Treasury Committee, the former business owners said the FCA was unable to handle serious complaints against the lenders it regulates. The questioning comes before a parliamentary debate on compensation for victims of banking misconduct.