Over Half Of Fraud Is Now Driven By AI, But AI Is Also Becoming The Solution, Report Finds

Feedzai, a leader in AI-native financial crime prevention, has released its 2025 AI Trends in Fraud and Financial Crime Prevention report, revealing the significant role artificial intelligence plays in both perpetrating and combating financial fraud.

According to the report, more than 50% of fraud now involves the use of AI technologies, with criminals employing generative AI to create hyper-realistic deepfakes, synthetic identities, and AI-powered phishing scams. These technological advancements have made scams more sophisticated, often devoid of the obvious red flags that once marked fraudulent activities.

“Todays scams dont come with typos and obvious red flags — they come with perfect grammar, realistic cloned voices, and videos of people whove never existed,” said Anusha Parisutham, Feedzai Senior Director of Product and AI. “Were seeing scam techniques that feel genuinely human because they’re being engineered by AI with that intention. But now, financial institutions also have to deploy advanced AI technologies to fight fire with fire to combat scams.”

The report highlights that 90% of financial institutions are now using AI to detect fraud, with many having integrated AI solutions within the past two years. AI is predominantly used for scam detection, transaction fraud, and anti-money laundering efforts, positioning it as a critical tool in the fight against financial crime.

“In some ways, AI is like a car. When automakers design a car, they dont just think about horsepower. They also consider safety features such as seatbelts, airbags, and anti-lock brakes that will keep drivers and passengers safe. The same is true for AI. Models that arent designed with trust at the forefront can lead to significant problems for users,” said Pedro Bizarro, Ph.D., Co-Founder and Chief Science Officer, Feedzai. “By ensuring that AI decisions are transparent, robust, unbiased, secure, and tested (TRUST), businesses will accelerate innovation and reinforce customer confidence.”

Despite the benefits of AI, data management and ethical considerations remain significant challenges for banks. The report indicates that 87% of financial institutions cite data management as a major hurdle, with fragmented data sources and regulatory constraints slowing AI adoption. Additionally, 89% of banks prioritize explainability and transparency in their AI systems to ensure fairness and accountability.

Looking ahead, AI is expected to augment human roles rather than replace them, with 43% of financial professionals reporting increased efficiency within fraud teams. As AI evolves, financial institutions will likely adopt more advanced solutions, such as behavioral analytics and real-time anomaly detection, to stay ahead of emerging threats.