New UK & EU Fraud Laws: Why Compliance Demands Smarter Technology

Compliance is fast becoming the defining challenge in fraud prevention, as regulators in both the UK and EU move to tighten corporate accountability.

At ValidSoft, we work closely with leading experts to understand how legal and regulatory changes will shape the fight against fraud. One of our advisers, Prof. Douwe Korff, a respected authority in privacy and data protection, recently provided us with his perspective on new fraud prevention laws emerging in both the UK and the EU. His insights are clear: the regulatory landscape is tightening, and organisations must take proactive steps to ensure their defences are fit for purpose.

From September 2025, the UK will introduce a new corporate offence of failure to prevent fraud under the Economic Crime and Corporate Transparency Act. This law represents a significant step change in accountability. Large organisations will be criminally liable if an employee, agent, or associate commits fraud for their benefit, unless the company can demonstrate that “reasonable prevention procedures” were in place. What makes this particularly challenging is that liability does not require knowledge or awareness by senior leadership. Simply failing to implement robust preventative measures could expose organisations to legal risk and reputational harm.

At the same time, the European Union is moving forward with a modernised payments and anti-fraud framework designed to address new and emerging threats. The proposals, which are expected to replace PSD2 in the coming years, include mandatory fraud information-sharing between payment service providers, IBAN-to-name matching for bank transfers, stronger consumer protection guarantees, and specific measures to combat “spoofing fraud” — cases where fraudsters impersonate banks or service providers. This is complemented by a wider recognition that fraud prevention responsibilities should extend beyond financial institutions to electronic communications providers such as internet carriers and messaging platforms.

The message from both jurisdictions is consistent: fraud prevention is no longer a matter of best practice or customer service; it is becoming a legal obligation at the heart of corporate governance.

Why Technology Matters More Than Ever

Prof. Korff notes, regulators are also raising expectations on how organisations should prevent fraud. Traditional multi-factor authentication, once seen as a robust defence, is increasingly regarded as insufficient in the face of sophisticated criminal techniques. Fraudsters have learned to bypass one-time passcodes, SMS-based authentication, and device-based checks. Biometric and behaviour-based verification are now seen as the “state of the art” and therefore the benchmark against which “reasonable prevention measures” may be judged.

This is precisely where technology can make the difference between compliance and exposure. Meeting regulatory standards in 2025 and beyond requires more than a policy on paper; it requires security measures that are proactive, intelligent, and difficult to circumvent.

How ValidSoft Enables Compliance and Protection

ValidSoft’s solutions have been designed with exactly these challenges in mind. We enable organisations to stay ahead of both fraudsters and regulators by embedding advanced authentication and monitoring capabilities into customer and employee interactions.

Our voice biometric technology delivers frictionless authentication that strengthens customer identity checks without adding unnecessary barriers. Unlike traditional MFA, which can frustrate users and still be vulnerable to attack, ValidSoft’s passive biometrics provide seamless verification in the background, balancing compliance with customer experience.

The UK’s new law highlights the risk of insider fraud. Here, too, technology plays a role. ValidSoft’s continuous authentication and precision identity assurance tools give organisations the ability to detect unusual or high-risk activity from employees, agents, or third parties. Fraud prevention is not only about who enters the system, but also about what happens once access is granted.

For firms operating across borders, the EU’s plans reinforce the importance of solutions that scale globally. ValidSoft’s technology is language-agnostic, enabling biometric verification across multiple jurisdictions without sacrificing accuracy or security. Combined with our AI-driven fraud detection and spoofing protection, organisations gain resilience against some of the most advanced threats regulators are now prioritizing, including synthetic voice deepfakes and impersonation attacks.

UK and EU Sending Clear Signals

The convergence of legal reform in the UK and EU sends a clear signal: fraud prevention is becoming a central pillar of corporate responsibility. Organisations that wait until these laws are fully enforced risk not only regulatory penalties but also reputational damage in an environment where customer trust is increasingly fragile.

By working with advisers such as Prof. Douwe Korff, ValidSoft ensures our solutions are aligned not just with current threats, but also with the regulatory expectations shaping the future. For financial institutions, payment providers, and enterprises, the imperative is clear: adopt technology that goes beyond minimum compliance and delivers real protection.

Fraud is evolving. Regulation is catching up. ValidSoft provides the technology that allows organisations to stay ahead of both.