The ever-increasing threat of fraud – and the sophistication of methods – requires a robust response from financial institutions.
But while artificial intelligence presents greater risk to financial institutions and their customers, and also part of the suite of protective measures used, organizations need to explain how technology is being used to avoid customer pushback.
The challenge for financial institutions is highlighted in a new report from financial crime intelligence experts at ComplyAdvantage, which shows that financial institutions are investing in new technology to identify and prevent fraud, but that customers are not comfortable with AI being used.
The risk is clear, with two-thirds of financial industry respondents citing AI as driving increased risk through deepfakes, sophisticated cyberhacks, and malware created using generative AI. Almost nine in ten respondents said their organization is increasing investment in new tech. But only around half said they are prioritizing explaining its use to customers.
“Today, AI is being utilized by both criminals - who are using it as new ways to defraud customers - and institutions, who are using it to stay ahead of fraudsters and defend their customers,” said Vatsa Narasimha, CEO of ComplyAdvantage. “We know from our work with financial institutions around the world that AI-based technologies can significantly enhance the fight against financial crime. We see a tremendous opportunity for banks to show consumers how these new technologies and processes like explainable AI are being used to safeguard their finances.”
Customers know they are at risk and 23% said they have been a victim of fraud in the last three years. However, while 89% express concern about fraud, only 40% are comfortable with banks using AI to fight financial crime.
The survey of 600 banking and financial services compliance professionals and 3000 consumers revealed the most common types of fraud experienced by respondents:
“If compliance leaders are concerned about how customers will receive this information, our survey suggests they should be optimistic,” added Narishma. “65% of consumers told us they are open to banks sharing their transactional details with other banks if it helps identify fraud patterns. So clearly, consumers understand that new, more innovative approaches are required to address our financial crime challenges. We would expect this percentage to increase further once the benefits of AI for improving financial crime detection are more widely known.”
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.