Tesco Bank fraud tars UK financial image, warns home secretary Amber Rudd

Hayley Kirton
Follow Hayley
Home secretary Amber Rudd leaving Number 10
Rudd warned that the UK's reputation could be at risk (Source: Getty)

Scandals like the recent cyber attack on Tesco Bank risk damaging the UK's prized financial reputation, the home secretary has warned today.

Speaking at a conference hosted by the Financial Conduct Authority (FCA), Amber Rudd cautioned that public confidence in financial institutions was rocked when such incidences occurred and the government saw cyber crime as a national security threat.

"The recent example of Tesco Bank is a stark example of what we face," Rudd is quoted by Reuters as saying.

Rudd added the UK could ill afford to be seen as a hiding spot for dirty cash.

Read more: Entrepreneurs must be nimble in the face of cyber risks

"Money laundering still poses a real threat both to the UK's international reputation and integrity of our world leading financial centre," Rudd remarked.

Since customers were hit by a widespread fraud over the weekend, Tesco Bank has paid out £2.5m in compensation to around 9,000 customers who had lost money from their accounts. Fortunately, this is less than half the 20,000 customers it was initially thought had been affected.

The National Crime Agency announced on Tuesday that it was launching an investigation into the incident.

Read more: Tesco Bank fraud attack: Here's what we know so far

Rudd is not the first to speak up about what the attack means for the state of banking security. Chair of the influential Treasury Select Committee Andrew Tyrie stated earlier in the week: "Millions of customers remain unnecessarily exposed to the risks of IT failures, including delays in paying bills and an inability to access their own money...We can't carry on like this."

Meanwhile, the chief executive of the FCA, Andrew Bailey, called the attack "unprecedented and serious" on Tuesday.

Read more: If you're using one of these passwords you probably need to change it

Opening his agency's conference today, Bailey said: "If we know one thing, it is that financial crime will mutate and morph and it would be unwise to make statements to the effect that we have it beaten. But, there is a lot we are doing well and will continue to develop to tackle financial crime."

Research released in September by Financial Fraud Action UK found there is now an incident of financial fraud once every 15 seconds, while there had been more than 1m accounts of people handing over personal details between January and June of this year, an increase of 53 per cent compared with the year before.

Related articles