Fraud surges as attacks outstrip traditional defenses

The average fraud loss rate across the industry increased slightly to 0.8 basis points, but this average masks significant variation. Notably, large banks reported losses nearly four times the industry average, indicating greater exposure due to size and speed. The increased sophistication and risk of fraud schemes is further highlighted by the fact that 46% of financial institutions reported an increase in the sophistication of fraud schemes. Institutions are simultaneously grappling with overlapping regulatory requirements (47%) and operational pressures related to faster and more diverse payment systems (41%).

To combat these threats, 68% of companies plan to increase spending on fraud detection year over year. The report identifies artificial intelligence and advanced behavioral analytics as the defining tools of modern fraud defense, enabling agencies to adopt a balanced approach of proactive (predicting fraud) and reactive (accelerating response).

However, the costs of fraud go far beyond direct financial losses. Half of agencies reported a loss of customer loyalty, with almost as many citing damage to reputation and lost business opportunities, highlighting that fraud now poses a significant threat to long-term growth and trust. Future investment strategies focus on continued modernization, hybrid defense models incorporating artificial intelligence and cloud infrastructure, and improved customer communications to enhance security and trust.

In “The State of Fraud and Financial Crime in the United States 2025,” learn how to:

• Unauthorized fraud is on the rise: Unauthorized party fraud (e.g., account takeover, credential theft) surged, accounting for 71% of all incidents and dollar losses, reversing previous trends.
• Artificial intelligence is an important means of defense: Broad integration of artificial intelligence and behavioral analytics is transforming fraud defense from reactive, rules-based systems to adaptive, intelligence-driven capabilities.
• consumer trust damaged: The real impact of fraud is on customers, including loss of customer loyalty (50%) and reputational damage (44%), indicating that fraud poses a threat to long-term growth beyond just financial losses.

About the report

“State of Fraud and Financial Crime in the United States 2025,”one Pimmts Intelligence Report prepared in collaboration with clogged (CashApp)'s survey is based on a survey of 200 executives working at U.S. financial institutions with at least $1 billion in assets and fintech companies with annual revenue of at least $100 million in 2024. The survey was conducted from September 30, 2025 to October 15, 2025. To ensure representativeness, we weighted responses from all banks and credit unions based on the country's asset size distribution. Respondents have deep knowledge and leadership responsibilities in: Compliance and Operations, Fraud and Risk Operations, Fraud Analysis or Strategy, or Trust and Security Analyst or Operations. All insights reflect independently collected, double-blind survey data and analysis by PYMNTS. It's possible that Bullock was under investigation but neither PYMNTS nor Bullock knew about it, which eliminates potential bias.