Intelligence Report | November 2026 - Flipbook - Page 10
“The biggest misconception is that the AI-based fraud
schemes are so sophisticated that banks cannot stop them,
which is not true. As sophisticated as AI scams are, the tools
to stop them are equally — if not more — sophisticated.”
Syed Raza, FTI Consulting
tide of AI-enabled fraud, including account verifi-
clients.
15%
cation software, behavioral biometrics and device
Additionally, bank employees may be inadver-
fingerprinting. Syed Raza, managing director with
tently exposing the organization to risk with their
said that their
bank or its
customers have
been directly
impacted by fraud
involving AI
FTI Consulting, gives identity verification analysis
own use of generative AI tools. Verizon’s 2025 Data
as one example. That technology can quickly alert
Breach Investigation Report found that 15% of
a bank in the event that an account is opened with
employees at organizations examined in the report
an ID that’s been used to open hundreds of other
were routinely using generative AI tools on corpo-
accounts; that could indicate that the identity has
rate devices, which can put company data at risk.
been stolen or synthesized for the purpose of cre-
“Banks are trying to balance allowing their
ating dummy accounts.
Source: Bank Director’s
2025 Risk Survey
$40B
Fraud losses could
top $40 billion
by 2027 with
generative AI
Source: Deloitte Center for
Financial Services
employees to use these tools that can bring a lot of
But if banks are going to use AI to fight fraud
efficiency gains without putting their data at risk,”
perpetrated by AI, it’s critical that they have clean
Goodwin says. “My biggest concern around this is
and consistent data to train those tools. They have
data leakage and data loss, people not understand-
to teach the technology what red flags it’s watch-
ing how to use these systems securely, where the
ing out for in the first place, Raza says.
information is going and how it’s protected.”
“You have to have a fraud program, update your
Finally, the board needs to make sure the
fraud program, make sure all fraud risks and pos-
bank’s risk management framework reflects the
sible scenarios are identified, controls well designed
variety of new threats that AI introduces into the
and are in place, and procedures are well document-
fraud landscape, including customer vulnerabilities
ed. Then you can automate whatever you want,”
and data leaks from casual usage of generative AI
Raza says. “But if you fail that first part, then
tools.
unfortunately no technology will be able to help.”
“The biggest misconception is that the
Bank leaders, including directors, need to
AI-based fraud schemes are so sophisticated that
understand these tools before they make the
banks cannot stop them, which is not true,” Raza
investment in them, says Scott Goodwin, a prin-
says. “As sophisticated as AI scams are, the tools
cipal in the DenSecure Group at Wolf & Co. They
to stop them are equally — if not more — sophis-
need to know what kind of security protocols are
ticated.”
in place for any AI tools the bank may adopt and
whether that data is ever repurposed for other
8 | BANK DIRECTOR INTELLIGENCE REPORT
Laura Alix is director of research at Bank Director.
