Regardless of where exactly an institution falls on the spectrum, it is likely that it is combating increased levels of fraudulent activity. Fraudsters are growing bolder and more sophisticated, especially in the age of AI. In particular, deep fakes capable of impersonating people with high levels of accuracy are concerning as a quickly evolving tool.

One of the things the report points out is that those who can identify bad actors at onboarding are more likely to prevent fraud because they can keep bad actors out of their systems. However, a majority (56%) catch fraud at the time of the transaction, compared with a third who do so at the time of onboarding. This is likely to become a bigger issue because the growing sophistication of deep fakes, combined with the amount of personal data on the dark web, is making it easier for fraudsters to open fake accounts.

It is also important to remember that fraud is not one problem, it is many problems — credit card fraud and account takeover fraud topped the list when it came to prevenance in the report, but they were listed in a category of nine. What’s more, fraudsters are only going to continue to come up with ways to break through defenses and thwart systems. As a result, banks and credit unions need a multipronged strategy for fraud prevention that ties back to identity and how they think about identity.

Beyond that, it is worth noting that having an AI strategy is likely going to be a large part of combatting fraud in the future. Ninety-three percent of respondents believe that machine learning and generative AI will revolutionize fraud detection. This is important not only from a capability perspective, but also because AI is a major toolset in fraudsters’ arsenals, and being able to understand and leverage it will be necessary to staying ahead of these actors. Another way to think about it is, you’ve got to be as sophisticated as your adversary.