US banks rush to fortify fraud defenses as threats soar, study shows

By Puja Sharma

Studies show that banks and credit unions need to enhance prevention strategies; consumers want data protection in their digital banking experience

Alkami Technology, a cloud-based digital banking solutions provider for financial institutions in the U.S., announced the findings of research that examined financial institutions’ evolving approach to fraud prevention and consumers’ perceptions of data protection within the digital banking experience.

Alkami Technology, a cloud-based digital banking solutions provider for financial institutions in the U.S., announced the findings of research that examined financial institutions’ evolving approach to fraud prevention and consumers’ perceptions of data protection within the digital banking experience.

With financial fraud on the rise, Alkami’s proprietary research reveals that financial institutions are bracing for what 77% believe will be an all-time high in fraud cases in 2025, with 33% needing to do more to safeguard account holders from evolving fraud tactics. Notably, 67% of surveyed banks and credit unions would be open to incentivising account holders to adopt stronger cybersecurity practices, recognising the need for a more collaborative approach to fraud prevention.

To further strengthen fraud prevention, financial institutions are prioritising proactive measures such as implementing real-time fraud detection with a multi-layered approach and expanding educational initiatives on emerging schemes and techniques for account holders to combat attempts and enhance security.

“With digital advancements accelerating, financial institutions play a critical role in leading fraud prevention and data protection efforts,” said Brad Cranford, director of product management at Alkami. “Digital banking users are aware of the increased threat to their financial well-being, and they are looking to their financial institution to protect their assets and reinforce trust.”

Recent research highlights just how much consumers value data security. The Generational Trends in Digital Banking Study commissioned by Alkami found that 93% of digital banking Americans (in total across all generations) indicated that protecting data from financial fraudsters and hackers was important or very important to them, while 91% of respondents indicated that protecting data from other unauthorised third parties was important or very important to them.

One major challenge banks face is balancing security with seamless user experiences. Financial institutions are exploring new technologies such as behavioral biometrics, AI-driven risk assessment, and adaptive authentication to ensure that security enhancements do not create friction in digital banking interactions. The growing use of AI in fraud detection has also proven effective, with financial institutions leveraging machine learning to identify suspicious activity in real-time.

Additionally, consumer education remains an essential part of fraud prevention. Many financial institutions are expanding their outreach efforts, offering interactive cybersecurity training, real-world scam simulations, and fraud alert notifications to empower consumers in the fight against financial crime. Encouraging customers to adopt best practices, such as enabling multi-factor authentication and regularly monitoring accounts for suspicious activity, can significantly reduce fraud risks.

As fraud threats continue to evolve, financial institutions must remain vigilant, adapting their security strategies to protect account holders while maintaining a seamless digital experience. With a more unified approach that combines advanced technology, consumer education, and industry-wide collaboration, banks and credit unions can stay ahead of fraudsters and build greater trust with their customers.