5 emerging fraud trends: How fintechs and banks can combat them

The financial services industry is at the forefront of combating new fraud tactics, with banks and fintechs employing various strategies to prevent scams like identity theft and account takeover fraud. As outlined by Experian’s Future of Fraud Forecast, emerging trends such as the use of generative AI for creating deepfake content pose significant threats, enabling fraudsters to convincingly impersonate bank officials and trick customers through phishing scams. Retail return fraud and the resurgence of "Frankenstein IDs" exemplify how fraudsters exploit vulnerabilities in return policies and create synthetic identities, respectively, leading to increased financial losses for institutions. The return to physical bank branches post-pandemic has also led to new security challenges, including check fraud and insider threats. Emotional scams, leveraging urgency or sympathy, further compromise customer security. Financial institutions are urged to adopt advanced detection systems, including machine learning and biometric authentication, and to educate customers about fraud tactics to enhance protection and maintain trust.

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