The new code aims to avoid customers being penalised for fraudsters’ actions.

By Andrea Monks and Nell Perks

Estimates indicate that fraudsters stole £1.2 billion from UK bank accounts in 2018 — a 16% increase on the previous year. UK Finance has described fraud as a “major threat to the UK”, and has confirmed that the finance industry is committed to tackling the issue. However, developments in banking that have led to quick and easy payment methods, combined with increasingly sophisticated cyber scams, mean that fraudsters continue to flourish.

There has been a particularly significant increase in authorised push payment (APP) fraud, in which a customer is tricked into making a payment to another account that is controlled by a criminal. Historically, victims of this sort of fraud have struggled to retrieve their money — only 23% of losses were returned last year.

By Gail Crawford

Cybercrime has become a critical issue for buyout firms as hackers are increasingly targeting sensitive business data to profit from insider knowledge. According to a Private Funds Management survey of 91 PE houses, 54% of PE firms said they had been hit with a cyberattack, while 45% said cybersecurity was a high threat to business operations. Despite this, 66% of PE firms said their cybersecurity programme was only partially implemented.

Buyout Firms Are Vulnerable

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If a PE firm falls victim to a cyberattack, highly sensitive information is likely to leak. This is problematic, especially in cases of listed buyout firms where performance data will be market sensitive, or in public- to-private transactions where any leak is price sensitive. Even where entities are not listed, buyout firms hold valuable information, not only on acquisition targets and portfolio companies, but also on their investors, which may include sovereign wealth and pension funds.

In our view, cybersecurity needs to be a priority for PE firms. However, many PE firms may have a limited number of IT support staff and a small budget to fight cybercrime. In order to combat the growing threat, this will need to change.