India’s fraud risks rise, but GenAI could be the game-changer, study shows

By Gloria Methri

India’s financial sector is witnessing a paradigm shift in fraud prevention, driven by the rapid adoption of Generative AI (GenAI). As digital transactions surge and cyber threats grow more sophisticated, Experian’s latest report highlights how Indian banks and FinTech are leveraging GenAI to bolster security and enhance risk management.

According to Experian’s 2025 Global Fraud Report, India is emerging as a key player in the adoption of GenAI-powered fraud detection systems. The country’s booming FinTech ecosystem, coupled with the increasing digitalisation of banking services, has necessitated real-time fraud mitigation strategies that can keep pace with evolving cyber threats.

With UPI transactions surpassing 100 billion in 2023, the need for AI-driven risk models has never been more pressing. The report finds that 72% of Indian financial institutions are either already using or actively exploring GenAI-powered fraud prevention tools, a figure significantly higher than in many Western markets.

How GenAI is Strengthening India’s Fraud Defences

The Experian report highlights several ways in which GenAI is transforming fraud prevention strategies in India:

1. Predictive Fraud Detection in Real Time

Traditional fraud detection relies on predefined rules and historical data. GenAI, however, enables real-time analysis of behavioural patterns, flagging suspicious transactions instantly. Indian banks and payment providers are integrating AI-driven anomaly detection to curb fraud in high-volume UPI and digital payment ecosystems.

2. AI-Generated Synthetic Identities to Combat Deepfakes

The rise of deepfake scams and synthetic identity fraud has posed a significant threat to India’s financial landscape. Experian’s report reveals that GenAI can generate synthetic datasets to train fraud detection models, making it easier to spot fake identities and prevent account takeovers.

3. Smarter Credit Risk Assessment

GenAI is also revolutionising how lenders assess borrower risk. Indian banks and NBFCs (Non-Banking Financial Companies) are leveraging AI to analyse alternative credit data, helping them identify high-risk applicants and prevent loan fraud before disbursal.

4. Adaptive AI for Personalised Fraud Prevention

A major challenge for financial institutions is balancing fraud prevention with customer experience. GenAI enables dynamic fraud detection models that adapt to individual user behaviour, reducing false positives and ensuring smoother transactions for genuine customers.

Experian’s report highlights that fraud remains a top concern for 84% of Indian financial executives, with UPI fraud, card-not-present scams, and synthetic identity fraud emerging as major threats. The RBI has intensified efforts to regulate digital transactions, but financial institutions are now looking at AI-powered compliance solutions to stay ahead of fraudsters.