The value of reported fraud in the British financial services industry plunged by more than 62 per cent, according to figures from accountancy firm BDO.
Data indicates that the value of reported fraud dropped to £214.9m last year from the previous year’s figure of £567.2m.
BDO also found that the number of reported fraud cases fell to 58, from the 70 cases reported back in 2015.
The largest fall in fraud cases coming from the insurance sector.
These findings come amid increased public and regulatory pressure on good practices within financial services.
Kaley Crossthwaite, partner and head of fraud at BDO, said it was “extremely encouraging” to see this increased scrutiny on the industry start to gain some traction by reducing the volume and value of fraud cases.
She pointed out that the insurance sector in particular has adopted more stringent systems and controls in a bid to address fraud.
Within the financial services sector, money laundering had the biggest fall in the value of fraud, falling to £98.9m from £201.6m, despite the number of cases rising to 20 cases this year from 15 last year.
Mortgage fraud also saw a huge year-on-year decline, both in terms of value and volume, dropping to four cases valued at £54.8m in total, from 13 cases valued at £151.1m.
Cases involving third party fraud, which refers to fraud that is committed using the victim’s identity without their knowledge, fell sharply in value to £47.6m from £209.7m.
Despite the drop in fraud in financial services, the total value of reported fraud last year across all UK industries hit a five-year high, increasing by a third to stand at £2bn.
Ms Crossthwaite said: “Sadly, the findings of this research are just the tip of the iceberg and many frauds continue to go on undetected.
“In many instances, even when they are picked up, corporates prefer to resolve the situation privately to avoid the public scrutiny that inevitably comes from going to court.”
She advised businesses to have strict systems and controls in place, ensuring that no one individual has unfettered access or responsibility over company accounts.