Regulators Urged to Treat Fraud as Industry-wide Ecosystem

Industry experts at a webinar hosted in association with Ecommpay told attendees that fraudsters have shifted their focus to human vulnerabilities and that Interpol has found AI-enhanced scams are 4.5 times more profitable than traditional methods.

The event featured Willem Wellinghoff, Ecommpay’s UK chair and chief compliance officer, with Teresa Connors as moderator. Panelists described fraud tactics moving from technical attacks to social engineering, impersonation and targeted deception, techniques that can bypass automated controls and are difficult for consumers and firms to detect.

Panelists identified two structural problems that limit current defences. First, responsibility for fraud prevention sits with multiple regulatory and oversight bodies, so no single agency has end-to-end authority. Second, firms build their own prevention tools and frameworks while data sharing between competitors and across sectors remains limited, allowing similar fraud patterns to recur in different places.

Speakers outlined regulatory reforms and industry arrangements that could address those problems. Suggestions included clearer legal frameworks to permit secure cross-firm and cross-border intelligence exchange, harmonised definitions and reporting standards to reduce duplication, and proportional requirements that scale with an organisation’s size and risk profile. The panel also discussed a central coordination point or common protocols to streamline incident response and threat intelligence sharing without imposing uniform obligations on all firms.

Panelists weighed the potential benefits and drawbacks of standardised fraud processes. Expected benefits were faster pattern recognition through shared data and consistent reporting that helps oversight bodies spot systemic threats. Concerns included privacy and data-protection limits, implementation costs for smaller firms, the risk of concentrating sensitive information and differing legal regimes across jurisdictions.

The idea of a non-profit, industry-wide body was raised as one way to unite the ecosystem. Supporters said such an organisation could host anonymised threat feeds, common taxonomies and best-practice playbooks. Critics pointed to governance, funding and legal liability challenges and questioned whether a voluntary scheme would achieve broad participation without regulatory incentives.

Panelists listed measures under consideration, including safe-harbour rules for sharing threat intelligence, standardised reporting formats and mechanisms for proportional compliance to lower barriers for smaller firms.

Webinar materials cited Interpol, which described financial fraud as “one of the world’s most severe and rapidly evolving transnational crimes, with significant economic and human consequences.” Panelists noted that an industry-wide approach and updated legal frameworks could enable more secure collaboration and improved information flow to address human-focused and AI-enhanced fraud.