#USA #New York #financial crime #Feedzai #Fraud Readiness

Are Banks Prepared for Future Fraud Threats?

Banks and fintech companies today express a high level of confidence regarding their readiness to combat emerging fraud threats. However, a recent survey conducted by Feedzai, titled Confidence Capability: The Feedzai Fraud Readiness Index 2026, presents a more nuanced picture that suggests these financial institutions may be overestimating their preparedness.

In this comprehensive study, which surveyed over 1,000 senior fraud leaders across 12 countries, banks rated their readiness to tackle fraud challenges with an average score of 80.2 out of 100. Yet, when their scores were measured against actual capabilities in areas such as data management, AI deployment, intelligence sharing, and fraud team operations, that score significantly dropped to 66.9. This gap of 13.3 points indicates a discrepancy between self-perception and reality.

The Disconnect: Budget vs. Capability

Interestingly, funding does not appear to be an immediate barrier for banks. A stunning 96% of leaders surveyed anticipate an increase in budgets directed towards AI-powered fraud tools over the next two years. However, the survey identifies fundamental issues holding fraud teams back:

• - A staggering 73% of analysts are bogged down with manual data collection instead of focusing on analyzing threats.
• - Only 41% of the surveyed institutions reported having fully interconnected data across fraud, anti-money laundering, compliance, and cybersecurity teams.

These inefficiencies mean that when an analyst investigates a suspicious transaction, they often have to consult multiple systems for a complete view, wasting valuable time that could be used to prevent fraud.

Industry Collaboration in Combating Fraud

The increasing sophistication of fraudsters necessitates a united front among financial institutions. A notable trend emerging from the survey results is the willingness of banks to share fraud intelligence with competitors, which marks a significant shift from past practices. An impressive 87% of banks would consider securely exchanging information about fraud incidents with other institutions.

Nuno Sebastião, the co-founder, chairman, and CEO of Feedzai, noted, "Criminals don't target individual banks; they attack the system as a whole. Therefore, a collaborative approach is essential to tackle fraud effectively." This transformation highlights the urgency of addressing gaps in fraud detection and prevention.

Identifying Leaders in Fraud Readiness

Out of the institutions surveyed, only 25.5% qualified as "leading" in fraud readiness with a score of 76 or higher. These leaders exhibit a clear commitment to improving their systems by prioritizing data connectivity and freeing up analysts' time for critical assessment.

The average industry score stands at 69.3 out of 100, with 73% of institutions falling into the "Capable" category, scoring between 51 and 75. A positive sign is that 68% of these institutions are either utilizing or planning to implement agentic AI for multiple fraud use cases, despite concerns regarding trust in autonomous decision-making.

Concluding Thoughts

Given the significant investment in AI technologies, the industry remains aware of the concurrent challenges they face. The full report, highlighting insights from participants across 12 countries, can be accessed at Feedzai's website. Starting October 22, institutions will have the opportunity to assess their standing against the Index using Feedzai's Fraud Readiness Self-Assessment Tool. As the fight against fraud continues to evolve, collaboration and data integration will be crucial in securing the financial landscape for consumers worldwide.

About Feedzai

Feedzai leverages advanced AI technology to foster trust in global finance by protecting people and their payments in real-time from fraud and financial crimes. Trusted by leading banks and payment networks, Feedzai safeguards over one billion consumers and handles a transaction volume exceeding $9 trillion annually. Learn more at feedzai.com.