A study by the National Fraud Authority (NFA) revealed that the sector accounts for Â£3.6 billion lost to fraud, which is out of a Â£38 billion annual total.
Findings from the Annual Fraud Indicator (AFI) report compiled by the NFA showed that online banking is one of the worst areas within the sector for fraud loss - the amount lost online was up by 14 per cent from last year to reach Â£60 million.
The total figure for the financial services sector is slightly lower than the Â£3.8 billion seen in the AFI for 2010.
Duncan Ash, marketing manager of financial services at SAS UK, said: âThis demonstrates that the industry is indeed moving in the right direction through improved fraud prevention methods however fraudsters are constantly modifying their approach and, as such, fraud prevention techniques can never remain static and need to evolve to stay one step ahead of the fraudsters.â
Further findings from the research showed that fraud losses within the private sector add up to Â£12 billion and account for almost a third of the total figure.