Scams have become one of the fastest-growing threats in the financial system. They are no longer occasional risks that can be dealt with through a warning email from your bank. Today, scams are organised, professionalised and fuelled by new technologies that make them more convincing than ever.
The impact is significant. Authorised push payment (APP) fraud, where victims are tricked into sending money to criminals, has surged across the UK. Losses now run into the billions.
In recognition of the scale of the problem, regulators are changing the rules. Since October 2024, UK banks and payment providers have been obliged to reimburse customers who fall victim to APP fraud, unless they can show gross negligence.
This shift places the onus firmly on financial institutions to offer meaningful protection, not just generic warnings.
The scale of the risk was underlined by the Marks & Spencer breach earlier this year. Criminals used social engineering techniques to gain access, deploy ransomware across hundreds of systems and disrupt the company’s online operations for weeks.
Customer data was exposed, and the retailer was forced to issue a profit warning of around £300m. It was a clear example of how fast-moving scams can bypass technical safeguards and cause financial damage on a very large scale.
Why do scams work?
Part of the problem is psychological. Fraudsters exploit urgency, fear, or trust to get people to act before thinking. A message that looks like it comes from a colleague or a call that seems to be from a bank official can override natural caution.
Criminals are now using artificial intelligence (AI) to sharpen their methods further. Deepfake voices can impersonate family members. AI-generated texts and emails can mimic legitimate communication styles. Fraudsters no longer need to be sloppy – their tools make them sound credible.
Traditional countermeasures are not enough. Awareness campaigns and standard warnings do little to change behaviour in the moment. By the time the message has been read or the button clicked, it is too late.
What is needed is real-time, embedded protection that works where customers make decisions.
The investment opportunity
Regulatory pressure, customer expectations and the sheer cost of scams are forcing change. Banks are recognising that prevention is far more effective than reimbursement after the fact.
From an investment perspective, this creates strong demand for companies, which can combine behavioural insight with scalable technology. As scams grow more sophisticated, tools that provide real-time, educational protection will be essential.
Scams may be getting smarter, but so too are the solutions. The Commonwealth Bank of Australia recently announced its scam-checking tools had cut scam losses by 76% in 2024 – a clear signal that smart interventions can deliver real impact.
By backing businesses that help both banks and their customers, we are investing in the future of fraud prevention – one where education and technology work together to tip the balance back in favour of consumers.
Falkin: Embedding scam protection directly into customers’ digital experience
This is where Falkin, one of our portfolio companies, is making a difference. Falkin offers banks and other financial institutions a platform that lets their customers check messages, websites and numbers for safety.
If you get a suspicious text, an email, or a dodgy website link, you can upload it, forward it or screenshot it into the system. Falkin will assess whether it’s risky, explain why and flag any psychological tricks being used, like urgency or emotional manipulation.
While traditional fraud technology focuses on payment transaction monitoring, Falkin helps banks to look for fraud before payments are made, as prevention is better than intervention.
What makes Falkin’s approach stand out is its focus on education in the moment as a behavioural nudge. Rather than simply labelling something ‘fraudulent’, it shows users how the scam works and why it feels persuasive. Over time, this helps people recognise and resist similar attempts on their own.
The model is B2B2C: Falkin sells to banks and fintechs, which integrate the service into their customer apps and platforms. The long-term goal is to make this a standard internal feature running inside banking apps and fintech platforms, offering real-time protection seamlessly to anyone at risk of being scammed.
Sam Stone is an investment manager at Triple Point Ventures. The views expressed above should not be taken as investment advice.