The new service will go live in 2015.
UK based banking association BBA has teamed up with BAE Systems Applied Intelligence to create Financial Crime Alerts Service (FCAS) to protect banks against cyber criminals.
The new system will use real-time intelligence that has been collected from 12 government bodies and partner agencies which including the National Crime Agency.
With the new alert system, government and law enforcement agencies will be able to warn banks about the latest cyber threats, enabling the banks to react more quickly.
FCAS is designed to share information to the banking officials so that they can track financial, fraud, and other violations.
BBA Chief Executive Anthony Browne said: "This alerts system is a powerful new weapon against fraudsters, cyber criminals and other crooks intent on stealing our customers’ money."
"Receiving real-time alerts from such domestic and international bodies, including the National Crime Agency and 11 other government and law enforcement agencies, will be vital intelligence for the army of staff banks have already hired to combat these threats."
"This service is a shining example of how banks and government can work together to benefit all customers."
The information sharing agreement between National Fraud Intelligence Bureau and banks has saved over £100m of fraud losses till now and the new system is based upon that agreement.
The BBA Financial Crime Alerts Service will also warn the banks against Terrorist financing, money laundering, corruption, and bribery.