Financial Crime Costs the UK £52 Billion

City of London Police reveals that 88 per cent of financial crime goes unreported

Financial crime has a total cost to the UK economy of £52bn, according to Special Inspector James Phipson, Commercial Director of the Economic Crime Directorate, at City of London Police. Speaking yesterday at the Wealth Management Association’s financial crime conference, SI Phipson highlighted that only 12 per cent of cybercrime is ever actually reported.

SI Phipson continued that even though police forces across the country had spent 34 per cent more of their time last year than previously on investigating fraud, they were still only inspecting a small number of the total estimate. SI Phipson stated that with the UK considered the financial capital of Europe, it makes an appealing target and decision makers need to be more alert to the seriousness of this threat.  Surprisingly most fraud attacks are likely to come from Spain, this unexpected epicentre indicates that much more understanding of the considerable threat to the economy is required.

The WMA’s first conference of the year was a great success, with over 150 members of the WMA and representatives from the wider financial services sector, treated to a host of insightful speakers, inside the Guildhall’s grand Livery Hall.

David Little, Head of Money Laundering and Corruption Threat Desk at the NCA, was quick to point out that the economic threat was a very serious issue with regards to national security, “yet only recently it has started to be taken seriously.”

The NCA has set up a Joint Money Laundering Intelligence Taskforce (JMLIT), headed up by Chris Bostock. JMLIT is there to share intelligence between the police and financial services institutions, with both sides bringing their expertise to the table to combat the threat of financial crime.

Chris comments: “JMLIT is a joint-partnership, not a government mandate.” Large players from the banking sector have already joined the programme, with Chris stating that he wanted WMA members to get involved to share their unique expertise that comes with managing over £670bn of the UK’s wealth, which WMA are progressing with member firms.

The conference concluded with a live ethical hack from Mustafa Al-Bassam, founding member of the well-known LulzSec hacking group, who now advises on information security, along with Rob Cutler, Partner at KPMG, discussing good and bad practice of anti-money laundering initiatives.

Liz Field, Chief Executive of the WMA, comments: “The financial crime conference was a huge success and I hope that all those that came found it as informative and insightful as I did. Financial crime is a huge threat, not only to the wealth management industry, but to the UK economy as a whole. As we’ve heard from law enforcement professionals, cooperation between the financial services industry and the authorities is crucial to combating this crime, so I hope many more institutions will do their upmost to work together against this shared adversary.”