Feedzai, the global firm focused on AI-native financial crime prevention, released its 2025 AI Trends in Fraud and Financial Crime Prevention report, uncovering how generative AI (GenAI) is used in financial fraud.
More than 50% of fraud involves the use of artificial intelligence. Generative AI has emerged “as a powerful tool for criminals, enabling the creation of hyper-realistic deepfakes, synthetic identities, and AI-powered phishing scams.”
Financial institutions are quickly catching on, with “nine in ten banks already using AI to detect fraud, and two-thirds have integrated AI within the past two years.”
The Feedzai latest report revealed that 90% of financial institutions are combating emerging fraud “with AI-powered solutions to safeguard consumers and counter rising threats.”
While banks are adopting AI to combat fraud, they face “significant roadblocks in implementation, especially ensuring the technology is ethical and transparent.”
In contrast, criminals using AI focus solely “on exploiting the technology for illegal gain, without the constraints that banks face in adhering to strict ethical and regulatory frameworks.”
92% of the financial institutions surveyed indicate “that fraudsters use generative AI, and only 8% noted that they do not see GenAI being used by criminals.”
According to the report, “44% of financial professionals report that deepfakes are used in fraudulent schemes, and 56% of professionals cite social engineering, a set of manipulative tactics used by fraudsters to exploit human psychology and trick individuals into revealing sensitive information, as another significant tactic powered by AI.”
Fraudsters are also utilizing voice cloning techniques, with 60% of professionals recognizing this as a major concern, “followed by 59% citing SMS and phishing scams powered by AI to deceive victims.”
AI-driven fraud tactics, including deepfakes, social engineering, and voice cloning, often “result in account takeovers and scams, which, as unauthorized fraud, are generally reimbursable under most circumstances and harder to detect.”
While deepfakes alone don’t provide “direct access to accounts, they play a critical role in building trust during the entrapment stage of scams, where criminals deceive victims into believing they are dealing with legitimate parties.”
Banks use AI to fight fraud, but they face “more obstacles in ensuring it’s ethical and transparent, while criminals exploit AI without such concerns.”
Despite AI’s benefits, data management remains “a significant challenge for financial institutions. 87% of banks cite data management as their biggest hurdle, with fragmented data sources and regulatory constraints slowing AI adoption, particularly among smaller institutions.”
As AI becomes essential in “fraud prevention, ethical considerations are paramount.”
The report finds that “89% of banks prioritize explainability and transparency in their AI systems, demanding governance frameworks that ensure fairness, security, and accountability.”
Feedzai’s TRUST Framework was developed to “help financial institutions build AI systems that are transparent, unbiased, and secure.”
In the face of criminals using AI, banks also “embrace it as a central defense mechanism.”
The report reveals that 90% of financial institutions “use AI to expedite fraud investigations and detect new tactics in real-time.”
AI is used for “scam detection (50%), transaction fraud (39%), and anti-money laundering (30%), positioning it as the critical tool in the battle against financial crime.”
Looking ahead, AI will not replace human roles but will “continue to augment them.”
Forty-three percent of financial professionals “report increased efficiency within fraud teams, allowing experts to focus on higher-value, complex fraud cases.”
As AI evolves, the future will see even “more powerful AI-powered solutions, such as behavioral analytics and real-time anomaly detection, to stay ahead of emerging threats.”
By embracing specialized AI, banks are “able to work harder and smarter in combating fraud-based threats, increasing the reach and efficiency of their defenses.”
AI has become a critical tool in “enabling financial institutions to detect fraud at scale, but human oversight remains essential to ensure its responsible use.”
While the road to full AI adoption remains challenging, the right technology and frameworks will “continue to redefine fraud prevention and bolster security for consumers and institutions.”
Methodology
This report is based on a 31-question survey conducted by “an independent research firm in March and April 2025, with 562 global fraud and financial crime professionals from financial institutions.”
The sample reportedly includes “30% from North America, 27% from Asia Pacific, 25% from Latin America, and 18% from EMEA, with respondents representing retail banks, acquiring banks, commercial banks, investment banks, credit unions or building societies and fintech / digital banks.”