Report: Financial Scams Drive 122% Increase in Fraud Losses by US Banks

Transactions have moved more digital, changing the fraud landscape. Financial institutions (FIs) have made real progress in holding off fraudsters attempting to exploit the digital shift. Our multiyear analysis finds that fraud related to more routine digital payments has decreased markedly over the last three years.

Nonetheless, our 2024 report also finds that 4 in 10 FIs report growing losses to fraudulent transactions, despite FIs’ progress in fighting digital payment fraud. This represents a higher share than detected in last year’s report.

How is this possible? Fraudsters have begun focusing more on customer-centric scams that manipulate human targets. Social engineering and scamming are tactics of choice. The result? The share of fraud stemming from scams rose 56% in the last year. And the share of dollars lost to fraudsters because of scams more than doubled.

FIs know the rules of the game are always changing, and they are racing to keep up. Our analysis, informed by a survey of 200 executives at 200 different FIs across the U.S., reveals key nuances in the space. For example, we find larger FIs have a head start over smaller competitors in adding new tech.

The November report reveals what FIs need to know about fraud and financial crimes:

• Which types of fraud were most common — and costly — in the last 12 months
• How fraudsters have shifted tactics in the last year
• Which fraud prevention technologies FIs should focus on adding to their anti-fraud toolkits
• Which specific fraud prevention technologies FIs are currently using, and how long they have been leveraging those tools
• What FIs name as the key barriers to innovation in fraud prevention
• Trends in how long smaller FIs are waiting to implement new technology systems

FIs are weighing cost concerns versus potential return on investment.  They need to be ready to reevaluate their fraud prevention strategies and match bad actors’ flexibility. This report includes crucial information FIs need to know to navigate this dynamic landscape.

About the Report

“The State of Fraud and Financial Crime in the U.S. 2024: What FIs Need To Know” is a PYMNTS Intelligence special report. This edition is based on a survey of 200 executives working at 200 different FIs in the United States with at least $1 billion in assets, conducted from Sept. 9 to Sept. 30. This study examines the dynamic, ever-shifting problem of fraud for FIs and how they are responding. It focuses on the latest developments in prevention technologies.

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