The banking sector is at a critical crossroads: it must continue driving digitalization while protecting its assets and customer trust against increasingly sophisticated threats. While technology has enhanced operational efficiency and user experience, it has also opened the door to new forms of fraud—harder to detect and capable of spreading rapidly.
In this landscape, traditional approaches are no longer enough. The scale of the problem calls for anticipation, automation, and intelligent data analysis in the fight against fraud.
According to LexisNexis’ True Cost of Fraud Study 2025, for every dollar lost to fraud, banks may face up to 4.6 times that amount in total costs, including financial, operational, and reputational damage. Acting before fraud occurs is no longer just a competitive advantage—it’s a strategic necessity.
In this context, artificial intelligence (AI) has gained prominence as part of fraud prevention strategies thanks to its ability to help banks act before fraud takes place, identify complex patterns, and respond more quickly, accurately, and effectively.
Global trends and data on banking fraud
Driven by digitalization and increasingly sophisticated attackers, bank fraud is a global issue that affects all markets—though with regional nuances. To combat it effectively, banks must understand the specific characteristics of fraud in each region and tailor their prevention strategies accordingly.
United States
According to the report The Impacts of Financial Crime on the U.S. Economy, losses from fraud reached $138.3 billion in 2023, with $127 billion directly impacting banks. Additionally, one in six households fell victim to fraud, with an average loss of $575 per household.
These losses go beyond personal or corporate finances—they also have a macroeconomic impact. The same report estimates that, had these losses not occurred, real GDP growth in the U.S. would have been 0.4% higher, and labor productivity would have increased from 1.5% to 1.9% in 2023.
Beyond the economic impact, operational data reveals a troubling evolution in digital fraud. LexisNexis’ True Cost of Fraud 2025 report highlights the following:
- Account creation and online access: Synthetic identities now account for nearly 30% of fraud detected during customer onboarding.
- Automated bot attacks: More than one-third of organizations have seen an increase in both frequency and complexity over the past year.
- Identity verification: 48% of companies identify it as one of the most vulnerable points in digital environments.
- Low adoption of advanced technologies: Despite available solutions such as AI, behavioral biometrics, and real-time risk scoring, over 40% of organizations still rely on manual or hybrid processes, limiting their ability to respond.
Europe
According to a joint report by the European Central Bank (ECB) and the European Banking Authority (EBA), the latest data show that during the first half of 2023, the fraud rate in the European Economic Area was 0.003% for wire transfers and 0.015% for card transactions, measured by number of transactions. While these percentages may seem low, their economic impact is significant due to the high volume of transactions.
The report also highlights that Strong Customer Authentication (SCA) systems have helped limit fraud, but not eliminate it. Fraudsters have found ways to bypass SCA, mainly through social engineering techniques like phishing, vishing, and spoofing. In wire transfers, fraud involving manipulation of the sender—such as so-called “CEO fraud”—currently accounts for nearly 80% of fraudulent transactions in Europe.
In the UK, the 2024 Digital Banking Fraud Trends in EMEA report notes that authorized fraud (where victims unknowingly cooperate) has surpassed unauthorized fraud in both volume and value since 2019. The report also highlights a 13% increase in account takeover (ATO) incidents and a growing use of generative AI tools to carry out scams in the customer’s own language.
Latin America
The situation in Latin America is equally concerning. According to the Digital Banking Fraud Trends in LATAM report, fraud cases rose by 32% in the first half of 2024 compared to the same period the previous year. Mobile devices are the source of 79% of fraud cases, and malware attacks surged by 113%, with Argentina, Colombia, and Mexico seeing the highest rates.
In addition to malware attacks, social engineering remains one of the most common methods for carrying out fraud. In countries like Chile, phone scams tripled during the first six months of the year.
From reaction to anticipation: A paradigm shift in the fight against fraud
For years, banks have approached fraud with a reactive mindset—detecting threats only after damage has been done and trying to contain the consequences. However, this model has proven inadequate in an increasingly digital environment, where attacks evolve rapidly, occur in real time, and target the most vulnerable points across different channels.
Today, the real challenge is staying ahead of fraud. This means moving beyond simple detection toward proactive prevention, using technologies capable of identifying abnormal behavior before a fraudulent transaction is completed. Artificial intelligence, real-time analytics, and behavioral biometrics are essential to this shift.
According to BioCatch’s report on Latin America, the most complex fraud schemes—such as account takeovers or browser-based mobile malware—can take days or even weeks to unfold. But when detected in time, these attacks can be stopped before causing any loss.
This paradigm shift requires banks to develop new capabilities:
- Continuous monitoring of digital interactions—not just the final transactions.
- Contextual analysis of user behavior to detect unusual patterns, such as logins from unfamiliar locations, device changes, or shifts in browsing times.
- Real-time intervention to block or verify suspicious activity before it’s processed.
Shifting toward anticipation not only improves fraud prevention but also helps strengthen customer trust. Because when a bank acts before a problem occurs, the impact goes beyond financial protection—it also reinforces its reputation.
How can Artificial Intelligence prevent banking fraud?
In recent years, artificial intelligence has played a key role in bank fraud prevention strategies. Its ability to process large volumes of data in real time and detect unusual behavioral patterns has led many financial institutions to explore its use as a preventive tool.
AI enables the replacement of traditional approaches—based on static rules and manual analysis—with adaptive models that prioritize real threats and detect suspicious behavior. This shift can improve the effectiveness of fraud prevention systems and significantly reduce false positives, which also enhances the customer experience.
Some of the main applications of artificial intelligence in fraud prevention include:
- Digital behavior analysis: systems that learn how users interact with their devices (gestures, browsing times, typing patterns) to detect suspicious access or impersonation attempts.
- Real-time risk scoring models: evaluate each transaction before it’s completed by assigning a dynamic risk level that can trigger alerts or require additional verification.
- Detection of undefined anomalies: unlike rule-based systems, AI can identify atypical behavior even if it hasn’t been previously classified as fraudulent.
- Breaking down data silos: by integrating data from multiple sources (compliance, security, operations), AI enables a more comprehensive view of risk and supports better decision-making.
- Automation of repetitive tasks: frees up time and resources for fraud prevention teams to focus on more complex cases.
Overall, artificial intelligence can help boost operational efficiency and support a shift toward smarter, more predictive, and prevention-oriented approaches—rather than simply detecting fraud after it occurs.
However, its implementation also brings significant challenges: from data quality and availability to the need for constant human oversight, as well as integration with existing systems and managing potential biases in AI models.
Real-world cases of Artificial Intelligence in fraud prevention
The use of artificial intelligence in banking fraud prevention is already a reality across various regions and levels. Financial institutions and public agencies alike are leveraging data-driven models and advanced algorithms to stay ahead of attacks, protect transactions, and strengthen customer trust.
- Mexico: According to the report Banking Fraud Trends in Digital Channels in LATAM, 2024 by BioCatch, one bank managed to reduce phone scams by 60% in the first half of 2024 by implementing behavioral biometrics solutions. These technologies detected deviations in how users interacted with their devices (e.g., finger swiping or app navigation), helping to block fraudulent transactions—even when initiated by the customer.
- Argentina, Colombia, and Chile: Financial institutions are using AI to detect malware during browser sessions by identifying patterns inconsistent with typical human behavior. This has helped prevent suspicious transactions before they could be authorized, enhancing security across digital channels.
- United Kingdom: According to the report Digital Banking Fraud Trends in EMEA 2024 by BioCatch, the use of behavioral biometrics helped reduce phone scams by 25% in 2023. As attackers shifted tactics, account takeover (ATO) incidents rose by 13%, prompting banks to use AI models capable of detecting suspicious repeated access and changes in users’ digital habits.
- European institutions: Organizations such as Europol, the European Public Prosecutor’s Office, and OLAF are already using AI tools to detect forged documents, synthetic identities, and deepfakes. These solutions are seen as critical in strengthening the fight against financial fraud across the European Union, especially in scenarios requiring fast and accurate verification of large volumes of data.
Real-Time technology as a competitive advantage
To complement the proactivity offered by technologies such as artificial intelligence, banks need tools capable of acting at the exact moment a relevant event occurs.
Having real-time technology allows institutions to respond more quickly when other systems detect unusual activity. This translates into:
- Immediate blocking of suspicious transactions before they are executed.
- Dynamic risk assessment based on context and user behavior.
- Direct intervention during the user session, without waiting for post-analysis.
- Greater operational agility and more efficient alert handling by internal teams.
In this context, Latinia is a strategic ally in helping banks’ customers react to critical events by providing technology designed to respond in real time and with maximum reliability.
Among its most notable capabilities are instant transactional alerts, generated based on rules built from both historical and real-time data. This allows banks to instantly notify customers of unusual activity, enabling a quick response that can prevent financial loss.
Latinia also offers secure and reliable communication channels. The Critical Event Gateway ensures the timely delivery of critical messages—such as transaction authorizations via OTP or suspicious activity alerts—without delays or delivery failures.
Beyond security: Impact on trust and customer experience
In an increasingly digital environment—where most interactions between customers and banks take place through remote channels—fraud prevention is not just about protecting assets; it’s about protecting trust. How a bank responds to a fraud attempt can be the deciding factor between retaining or losing a customer.
An effective fraud prevention strategy is no longer measured solely by its ability to block fraudulent activity, but by how it does so: quickly, accurately, and with minimal friction for the user. Delayed alerts, constant false positives, or cumbersome verification processes lead to frustration and distrust. On the other hand, a smooth experience—where the customer feels protected but not surveilled—reinforces loyalty and enhances the perceived value of the bank.
Artificial intelligence and real-time technologies not only help anticipate fraud, but also enhance the customer experience. By accurately identifying risk and acting only when necessary, banks can deliver effective protection without unnecessarily disrupting the customer’s normal activity. This reinforces the sense of security and allows the customer to stay in control.
Ultimately, fraud prevention is no longer just a technical or regulatory task—it’s a core part of the customer experience strategy. And in a market where financial products often look the same, trust is a key differentiator.
Explore how Latinia’s real-time communication solutions can enhance your bank customers’ ability to respond to critical events and strengthen their trust.
Contact Latinia for a consultation, and visit our website to learn more.
Categories: Security & Compliance