Unlocking the UK's Real-Time Payment Potential: Security Innovations and Investment Opportunities

The UK's real-time payment (RTP) market faces a paradox: despite surging adoption, consumer confidence in its security lags dangerously behind. FICO's latest survey reveals that 23% of UK consumers are unsure whether RTP processes include sufficient security checks, while only 35% believe RTPs are more secure than credit cards—a stark contrast to the global average of 51%. This underconfidence is holding back the UK from realizing its full RTP potential, even as fraud losses exceed £450 million annually. Yet, this challenge also presents a golden opportunity for banks and fintech firms to carve out leadership by investing in cybersecurity innovations.

The Security Confidence Gap

FICO's data underscores a critical misalignment between consumer perception and technological reality. While 79% of UK consumers have sent RTPs—lagging behind global adoption rates of 91%—only 35% trust RTPs to be more secure than credit cards. This distrust is compounded by rising scam incidents: 73% of UK respondents received suspicious communications (texts, emails, calls) in 2024, a 5% annual increase. The financial stakes are high: 14% of victims proceeded with payments despite receiving scam warnings, resulting in losses that now total over £450 million annually.

The regulatory response has been swift. Starting in late 2024, the UK's Payment Systems Regulator mandated banks to refund victims of authorized push payment (APP) fraud within five days, up to £85,000. This has created both a compliance burden and a reputational imperative for institutions to reduce fraud proactively.

The Strategic Opportunity: Building Trust Through Technology

The path to unlocking RTP's full potential lies in addressing three pillars: security transparency, fraud detection innovation, and consumer communication. Firms that excel in these areas stand to gain disproportionate market share as RTP adoption trends upward.

1. Transparent Security Communication

Consumers crave clarity. Only 37% of UK respondents prefer receiving scam warnings via their bank's app—the most secure channel—yet many institutions still rely on less secure methods like email or SMS. Banks that prioritize app-based communication and educate customers on RTP's safeguards (e.g., Confirmation of Payee, behavioral analytics) can build trust. For example, HSBC's recent rollout of real-time transaction alerts via its mobile app reduced customer complaints by 18% in pilot regions, according to internal reports.

2. Adopting Cutting-Edge Fraud Detection Tools

FICO's Scam Signal, which won an industry award in 2024, exemplifies the power of innovation. By analyzing telephony signals to detect scams, it reduces false positives while identifying high-risk transactions in real time. Banks like Barclays and NatWest that partner with FICO or develop in-house solutions could see significant risk reduction. Meanwhile, fintechs such as Revolut and Starling Bank, already known for app-centric user experiences, are well-positioned to integrate such tools and attract digitally savvy customers.

3. Leveraging App-Based Engagement

The preference for banking apps as a secure communication channel is a strategic lever. Institutions that invest in user-friendly, app-based platforms with robust fraud safeguards can reduce losses and increase customer loyalty. For instance, a reveals that Lloyds Banking Group's “SafePay” module, which flags unusual transactions in real time, has driven a 25% increase in app-based RTP usage since its launch.

Investment Implications

The underpenetrated UK RTP market—where business-to-consumer usage is just 16% versus a global average of 31%—offers fertile ground for investors. We recommend overweighting banks and fintechs demonstrating the following:

1. Cybersecurity R&D Spend: Firms like Barclays, which allocated £1.2 billion to digital and security initiatives in 2024, are likely to outperform peers.
2. Partnerships with Fintech Innovators: Collaborations with companies offering solutions like FICO's Scam Signal or AI-driven fraud analytics (e.g., Darktrace's Cyber AI) can provide a competitive edge.
3. App-Centric Communication: Institutions prioritizing mobile-first fraud alerts and educational content (e.g., Nationwide Building Society's “Fraud Guardian” app feature) will attract younger, tech-savvy users.

Avoid banks lagging in digital transformation or those relying on outdated fraud detection systems.

Conclusion: A New Era for RTP Leadership

The UK's RTP market is at a crossroads. With consumer trust fragile and fraud losses mounting, institutions must act decisively to rebuild confidence through transparency and innovation. Firms that invest in real-time fraud detection, app-based communication, and security education will not only mitigate risks but also capture a growing slice of a market primed for expansion. For investors, this is a sector where technology leadership translates directly into market share—and returns.

The time to act is now. As RTP becomes the default for everyday transactions, the winners will be those who turn security from a liability into a differentiator.