German Banks report rising fraud losses, survey finds

By Vriti Gothi

A majority of German banking leaders report a sustained rise in fraud attempts and financial losses, with many attributing part of the increase to structural changes in the payments landscape, according to a new survey commissioned by BioCatch.

The study, conducted among fraud management, anti-money laundering (AML), compliance leaders, and C-suite executives at German banks, indicates mounting pressure on financial institutions as digital payment adoption accelerates. Half of all respondents said fraud losses at their organisations are increasing. The figure rises to 65% among fraud team leaders and 67% among banking executives.

Two-thirds of respondents (66%) estimate their institution’s annual fraud losses exceed $10 million (€8.52 million), underscoring the financial materiality of the threat. The findings suggest that fraud risk is not only growing in frequency but also in scale.

“German banking leaders appear to attribute some of this increase in fraud to legislation,” said Thomas Peacock, Director of Global Fraud Intelligence at BioCatch. “More than half of those surveyed in Germany believe fraud risk increased following the implementation of real-time SEPA payments, which became mandatory in 2025.”

The introduction of mandatory instant payments across the Single Euro Payments Area (SEPA) has reduced transaction settlement times to seconds, but it has also narrowed the window for fraud detection and intervention. Instant payment rails, combined with increasingly sophisticated social engineering tactics, have shifted operational risk dynamics for banks.

Despite the reported increase in fraud attempts and losses, nearly three-quarters of respondents said they believe their existing fraud controls are effective. However, the data suggests a recognition that incremental improvements may be insufficient. Seventy-six percent of German banking leaders said their institution is considering upgrading current fraud controls, while 11% have already begun procurement and implementation processes.

“The pressure on German financial institutions has never been greater,” said Mathias Schollmeyer, Country Manager for Germany at BioCatch. He pointed to an “unrelenting surge in fraud attempts,” vulnerabilities linked to instant payments, and the growing availability of artificial intelligence tools that enhance both the scale and precision of attacks. “Their customers deserve preventive, trusted solutions to help their banks better protect them in this increasingly complex fraud landscape.”

Operationally, manual intervention remains widespread. German respondents reported reviewing the majority of fraud cases manually, notably above the continental average of 46%. While manual review can provide contextual oversight, it may also limit scalability as transaction volumes grow.

Reimbursement practices also appear to be evolving. Only 36% of respondents said their bank currently reimburses at least half of customers who fall victim to scams—below both the European average (53%) and the global average (44%). However, nearly three-quarters reported that their institution is proactively adjusting reimbursement policies ahead of new requirements under PSD3 and the Payment Services Regulation (PSR).

Interestingly, concerns over advanced AI-driven threats appear relatively contained. A significant 84% of respondents said they believe their bank is prepared for so-called agentic AI attacks, even as generative AI tools lower barriers for cybercriminal activity.

For the German banking sector, the findings highlight a widening gap between rising fraud exposure and legacy control frameworks. As instant payments, regulatory change, and AI-driven threats converge, institutions face mounting expectations to modernise fraud detection, reimbursement policies, and operational resilience.