Banking security leaders see AI as the industry's top threat

The wide majority of banking leaders see AI as the largest threat facing the industry, and are concerned about the ability to distinguish legitimate and non-legitimate agentic activity at machine speed, research suggests.

A survey of fraud management, anti-money laundering and risk and compliance leaders across 25 countries, commissioned by fraud and financial crime prevention company BioCatch, found that 84% believe AI will be the industry’s greatest exploitable vulnerability in the next 12 months.

Meanwhile, 88% say AI has already increased the sophistication of fraud, and 80% say their financial institution has already encountered attacks using agentic AI.

The scale of the problem is increasing, with 72% of respondents concerned it will be very difficult to distinguish between legitimate AI-assisted actions and malicious AI activity when AI agents evolve to commonly initiate transactions.

The survey also found that more than four in five financial institutions are facing increasing fraud attempts, while 76% report increasing fraud losses. Nearly half of respondents say their organisation is losing more than US$10 million annually to fraud, with 5% losing more than US$50 million.

Customer attrition is also increasing, with 68% of respondents stating that their current fraud prevention and reimbursement approach has led to a net loss of customers. Of these, more than half (56%) attribute the loss to unreimbursed losses, with the remainder blaming customer attrition on too much friction.

BioCatch CEO Gadi Mazor said fraud losses are increasing globally.

“AI is starting to reshape how customers interact with e-commerce sites and financial institutions and will change how criminals execute fraud and other financial crimes,” he said. “As digital interactions continue to grow faster, more automated and increasingly driven by agents, we must move beyond static identity checks and toward a deeper and immediate understanding of behaviour, intent and trust.”

But Mazor said the industry is seeking solutions, with 86% of respondents reporting that gaining real-time intelligence sharing on the receiving account in an interbank transaction would improve their bank’s ability to stop scams, and 85% saying it would help stop fraud and financial crime.

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