Summary Payment Systems Broadcast #24: Tackling Public Sector Fraud

Insights

15 Oct

To explain the UK’s approach to tackling public sector fraud, Mark Cheeseman OBE, CEO of the UK’s Public Sector Fraud Authority (PSFA), joined FNA’s Phillip Straley and Carlos Leon for session 24 of the Payment Systems Broadcast. Mark joined to unpack insights from the PSFA’s Annual Report, published in June 2024, and to explore how governments and financial authorities can strengthen their defences against fraud and scams through smarter systems, stronger cultures, and deeper collaboration.

The PSFA was created in 2022 as part of the UK government’s response to lessons learned during the pandemic, which revealed deep structural vulnerabilities in public systems when it came to fraud. “The PSFA was introduced to work with public bodies and government departments to better understand and reduce the impact of fraud against the public sector,” Cheeseman explained. The authority’s mission, he said, is built on three pillars: setting standards and outcomes, analyzing risk across systems, and building lasting capability inside the government.

The public sector, Cheeseman noted, is vast and complex, spanning hundreds of organisations that often work in isolation. Fraudsters, however, “don’t often see departments or agencies, they see government as one target.” The solution, therefore, must be a systemic approach, creating what Mark calls a “cross-system perspective” that treats fraud as a shared national threat rather than a departmental problem. That philosophy has already helped the UK government prevent and recover nearly half a billion pounds in fraud and error in the past year alone.

A key weapon in that systemic approach is the UK’s Single Network Analytics Platform (SNAP), a cross-government data tool that brings together previously fragmented datasets to reveal hidden links between individuals, companies, and transactions. “It matches data across each other. It networks it, it looks for the connections between different things,” Cheeseman explains. By automating pattern recognition across vast data pools, SNAP allows investigators to uncover fraud in minutes rather than months, while maintaining strict adherence to privacy and data protection laws.

The concept of using network analytics to expose hidden relationships is one that FNA is particularly familiar with. Phillip Straley, FNA’s President, drew direct parallels between the PSFA’s work and the private sector’s global battle against rising consumer scams, pointing out the similarities with national-level organizations tackling consumer fraud in an increasing number of countries around the world. “No one organization has all the data, insights, or analytics to solve this problem,” Straley noted, arguing that a national-scale collaboration model is absolutely critical, particularly in countries with faster payment systems that criminals exploit to move stolen funds at speed.

Here too, networks are a key part of the answer, with FNA’s Fraud Portal using network analytics, machine learning, and graph AI to help banks, payment system operators, central banks and national law enforcement identify suspicious patterns and recover losses in real-time. Straley points to Malaysia’s National Scam Response Centre (NSRC), which deploys FNA’s Money Trails to trace transactions across more than 20 payment rails. The result, “they’re now getting back between $25 and $30 out of every $100 scammed – up from around 50 cents before the system and NSRC existed,” Phillip explains.

While Phillip advocated for the need to “fight AI with AI” in response to fraudsters deploying evermore sophisticated methods to defraud victims, both Mark and Phillip agreed that technology is only part of the solution. The other, more complex challenge lies in changing the culture when it comes to fraud. Cheeseman describes fraud as a “hidden crime”, one that many organizations are ashamed and reluctant to admit exists within their systems. “Finding it isn’t a sign of failure,” he insisted. “It’s a sign of success, a sign of a healthy system.” Changing that mindset across public services, he argued, is as important as any technological upgrade.

Straley echoed the point from a private-sector lens. “Prevention begins with education,” he said. “This education needs to be continuous because criminals are changing tactics day by day.” In practice, that means teaching consumers to recognise scams as much as it means deploying data analytics or other new technology.

The conversation also underscored how collaboration must extend beyond national borders. The PSFA works with peers in Australia, Canada, New Zealand, and the US through the International Public Sector Fraud Forum, sharing standards and guidance on prevention. “Our contexts are different,” Cheesman said, “but our challenges are very similar.”

In the private sector, similar cross-border cooperation is emerging among financial authorities and payment operators. Straley cited cases in Southeast Asia where quick data sharing between jurisdictions has resulted in the recovery of millions of dollars in stolen funds. “There are already glimmers of light,” he said, “where money has been found, frozen, and returned because cross-border systems are now supporting each other.”

For both Cheeseman and Straley, the ultimate message was unmistakable: fraud is not an isolated problem—it is a network problem. And like any complex network, it can only be solved through shared intelligence, trust, and collaboration across stakeholders and borders.

The future of fraud prevention lies not in isolated systems, but in connected ecosystems where data, technology, and people work together seamlessly.

As Cheeseman put it, the priority is to “advance the agenda and do more.” But doing more doesn’t just mean investing in new tools—it means building a culture that values vigilance, transparency, and learning as much as enforcement.

Technology like the PSFA’s Single Network Analytics Platform and FNA’s Fraud Portal show what’s possible when insight meets action. Both demonstrate that when governments, central banks, and financial institutions align their efforts, they can shift from unsystematically chasing fraud after the fact to stopping it before it occurs and recovering funds when needed – the ultimate form of protection against fraud and scams.

Fraud will never disappear—but our ability to anticipate, outthink, and outpace it can have a real impact. And that, ultimately, is where the real transformation begins: in using intelligence not only to protect financial systems, but to rebuild public trust in how they work.