10 Key Trends Driving the Fraud Prevention Industry in 2025
The fraud prevention industry is evolving, constantly.
According to Juniper Research, we will see 86% market growth between 2024 and 2029, with $32.2 billion spent on fraud detection and prevention solutions in 2029. What major fraud prevention trends should we expect moving forward?
1. Fostering collaboration between banks, vendors, and customers
The rapid rise in payment fraud attacks is a clear signal: to create a safe digital environment and a trustworthy payment ecosystem, all stakeholders must join forces. Cooperation between financial institutions, vendors, and consumers is essential because fraudsters are resourceful and continually seeking to expose weaknesses wherever they find them. Sharing information, data, and experience is therefore crucial to prevent fraud effectively. This is why industry-wide initiatives and events like the Fraud Summits are increasingly important.
2. Enhancing fraud prevention with artificial intelligence
Fraudsters are increasingly employing artificial intelligence to deceive consumers. AI enables them to craft more efficient phishing campaigns, more convincing impersonation scams, and better-targeted malware. To defend against sophisticated AI-driven fraud, financial institutions must stay ahead of attackers and use the same tool—artificial intelligence—to enhance their anti-fraud defenses. AI-based fraud-detection systems can adapt to new fraud trends in real time and improve detection capabilities for scams, social engineering, and deepfake attempts to bypass biometric authentication.
3. APP fraud in the spotlight
The importance of advanced technology solutions in the fight against fraud is growing as fraudsters’ tactics evolve. Rather than attacking IT systems directly, they are increasingly focusing on the weakest link in the chain: end-users. The rise of scams and social engineering has led to a boom in fraudulent payments authorized by legitimate customers acting under false pretenses. Authorized push payment (APP) fraud is currently the top fraud tactic globally and one of the biggest threats to financial institutions and their customers due to its problematic detectability.
4. Leveraging behavioral intelligence
Behavioral intelligence is proving to be one of the most effective ways to successfully prevent even newer types of fraud. Its strength lies in its comprehensive approach to fraud prevention. For example, ThreatMark’s Behavioral Intelligence Platform collects and analyzes data on user behavior patterns, transactions, devices, threats, and other data points across the entire customer journey and all digital channels. The advantage of this approach is the ability to protect legitimate users from fraud while identifying fraudulent users, leading to the disruption of the entire fraud ring. This has a much higher impact on fraud loss reduction with long-lasting effects.
5. Shifting liability landscape
Liability for fraud losses currently varies by region, country, and financial institution. However, the global proliferation of payment fraud and the subsequent financial losses to consumers are prompting regulators to implement policies that increasingly shift responsibility for fraud from defrauded customers to financial institutions. The latter, after all, have far more expertise, resources, and tools to fight increasingly sophisticated fraudsters. A fitting example is the UK and the new mandatory reimbursement requirements for victims of APP fraud that will come into force this autumn. Joining in are many others, including the EU. Compulsory compensation for victims of certain fraud scenarios is part of the forthcoming PSD3 and PSR1 legislation.
Read more about the liability shift
6. Breaking down the silos
Connecting fragmented solutions into one complex system is another important trend we see today. This is manifested both in technology and teams; for example, integrating anti-fraud, card fraud, and anti-money laundering teams results in more successful fraud detection and faster identification of fraudsters and money mules. Breaking down information and data silos gives financial institutions a more holistic view of data and better insight into fraud tactics, attack tools, behavioral patterns, and payment infrastructure. As a result, banks and PSPs can fight fraudsters more efficiently and set up more impactful fraud-prevention strategies.
7. Establishing platforms for data-sharing within the industry
As recently introduced legislation shows, regulators are also moving towards eliminating information barriers. For example, the UK’s Specific Direction 18 requires payment firms to improve data sharing to spot and prevent APP scams. The European Union seeks to do the same with PSD3 and PSR1, aiming to create a GDPR-respecting legal basis for PSPs to share fraud-related information among themselves via dedicated IT platforms. Greater collaboration across the industry is undoubtedly a positive step, as sharing information on threats, new tactics and the payment infrastructure of cybercriminals will help disrupt fraud at scale.
8. Leveraging multi-factor authentication
As the fraud threat grows, bullet-proof verification of users’ identities is vital. Multi-factor authentication (MFA) has become the gold standard for protecting accounts from unauthorized access and data breaches. The factors used for authentication fall into three categories: something the user has (credit card, key, security token, etc.), something the user knows (typically a password), and something the user is (biometrics, such as fingerprint, voice, or facial recognition). It is the latter area that has recently seen widespread adoption in authentication processes. However, even MFA faces challenges: social engineering, SIM swapping, MFA hammering, and the advent of face and voice deepfakes demand constant innovation to make authentication more robust and resistant to breaches.
9. Focusing on user experience
Financial institutions face a difficult task. On one side there is a fraud front, with criminals trying to steal clients’ money by any means necessary. On the other side are the clients themselves, who want the easiest possible access to digital banking, the ability to log into their accounts anytime, from anywhere, and instant transactions that take seconds rather than days or hours. Delivering the best possible customer experience while safeguarding their assets is one of the main challenges banks face. In a competitive financial industry, it is essential to use fraud-detection systems that minimize customer friction.
10. Spreading awareness about fraud prevention trends and threats
The surge in scams and social engineering cases clearly shows that to effectively prevent fraud, we need to educate those most exposed—i.e., consumers—about the risks. While it is true that many scams are indeed sophisticated and difficult to detect, a large proportion of fraud attempts are easy to identify if you know the tactics of the attackers and what to look out for. Awareness campaigns will therefore continue to be an integral part of the fight against fraud. The development of the digital environment should go hand in hand with knowledge of its weaknesses and, above all, the risks to which every bank customer is exposed.