Transactions have become faster and more digitalised, driven by unprecedented technological advancements. Real-time payments (RTP), Decentralised Finance (DeFi), and Buy Now, Pay later (BNPL) are no longer just ‘buzzwords’ or ‘in the adoption phase’ — they are now fully integrated into the US financial ecosystem.
However, this rapid integration has also introduced new vulnerabilities, which fraudsters are actively exploiting. The legacy systems, originally designed for a simpler financial environment, rely heavily on static rules and batch processing, which have become increasingly less effective in addressing the complexities of modern financial crimes.
In the US, transaction fraud is most prevalent among individuals aged 30-39, with the highest losses occurring in online shopping and miscellaneous investments. Additionally, many unsuspecting victims are being exploited as money mules, unknowingly facilitating illicit fund transfers. We are witnessing a significant rise in the use of mule networks for laundering fraudulent proceeds, making financial crime detection more challenging.
Source: Everest Group Research
Artificial Intelligence (AI) is making social engineering attacks more sophisticated and scalable. Organisations struggle with identity verification, as AI-driven fraudsters create highly realistic impersonations and deepfakes.
Over the past decade, nearly USD 4.5 billion has been lost to romance scams in the US alone, with AI tools increasingly being used to generate persuasive content and scripts for these frauds.
Business Email Compromise (BEC) scams have become more advanced with AI-powered natural language generation and speech synthesis. AI also enables fraudsters to crawl social media and public records, crafting highly personalised phishing messages.
Financial institutions are especially vulnerable to synthetic identity fraud, where criminals blend genuine and fabricated personal details to construct new identities. With the rise of AI-driven fraud techniques, fraudsters can now automate identity creation, generate deepfake documents, and even mimic human behaviour to bypass security checks. This method allows fraudsters to gradually establish credit profiles, ultimately enabling them to carry out large-scale financial fraud.
Fintech platforms and Buy Now, Pay Later (BNPL) services have been prime targets, as their rapid digital onboarding processes can be exploited by fraudsters to access unsecured credit.
With the widespread adoption of real-time payment (RTP) systems such as FedNow, Zelle, Venmo, and The Clearing House (TCH) RTP network, fraudsters are increasingly exploiting the speed and irreversibility of instant transactions to conduct financial crimes.
As per our forecast, there is a significant surge in Authorised Push Payment (APP) fraud, where victims are tricked into authorising payments to fraudulent accounts.
Account takeovers (ATO) and social engineering scams have intensified, as fraudsters exploit the speed and finality of real-time payments, making funds recovery extremely difficult after a fraudulent transfer.
As cryptocurrency and decentralised finance (DeFi) platforms gain mainstream traction in the United States, fraudsters are rapidly exploiting regulatory gaps, smart contract vulnerabilities, and anonymous transactions to execute large-scale financial crimes.
Out of the IRS Criminal Investigation (IRS-CI) Top 10 cases of 2024, three are crypto-based frauds involving stealing funds and money laundering.
Along with prevalent crypto scams like rug pulls and pump-and-dump, more sophisticated attacks on DeFi protocols and platforms are also increasing.
Everest Group is also witnessing a surge in pig butchering scams. These scams often involve fake investment opportunities, particularly in crypto and online trading, leading victims to believe in guaranteed high returns before their funds vanish.
The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) have intensified their crackdown on fraudulent cryptocurrency platforms, focusing on illegal securities offerings, Ponzi schemes, and unregistered crypto exchanges. There is increased scrutiny on stablecoins and Decentralised Finance (DeFi) platforms to ensure compliance with anti-money laundering (AML) and Know Your Customer (KYC) regulations. These enforcement actions have been ongoing, with significant developments occurring in 2024.
FinCEN’s Beneficial Ownership Rule, effective as of 1 January 2024, part of the Corporate Transparency Act (CTA), requires banks to cross-check ownership details to enhance customer due diligence (CDD) and prevent money laundering.
In November 2024, the Consumer Financial Protection Bureau (CFPB) announced that payment apps like Venmo and PayPal will now face the same regulatory scrutiny as traditional banks. This mandates strict AML compliance, enhanced KYC protocols, and real-time fraud monitoring to prevent financial crime.
New regulatory discussions are pushing for mandatory reimbursement policies for victims of APP frauds, similar to the model witnessed in the UK. If implemented, these policies would increase liability for banks and payment apps like Zelle, Venmo, CashApp, and RTP systems, encouraging proactive fraud prevention measures. Additionally, there is a growing emphasis on stronger dispute resolution mechanisms to ensure that victims of APP fraud have better recourse options and that financial institutions play a more active role in detecting and preventing fraudulent transactions.
Europe has generally maintained a more stringent regulatory stance, particularly in the financial sector. In contrast, recent deregulatory initiatives in the US have raised concerns about potential increases in financial crimes, including fraud, cross-border illicit activities, human trafficking, and money laundering.
The rise of AI-driven fraud, RTP scams, synthetic identity fraud, and crypto-based financial crimes highlights the growing need for proactive and comprehensive fraud detection and regulatory oversight. Banks, fintechs, and payment platforms must invest in AI-powered fraud detection, real-time risk assessment, and stronger identity verification frameworks. The fight against fraud requires continuous innovation, regulatory adaptation, and cross-sector collaboration to protect consumers, strengthen financial security, and maintain trust in the US financial system.
Dheeraj Maken is a Practice Director at Everest Group, leading the firm's Banking and Financial Services Business Process Services programme. With over 13 years of experience in the IT/ITES industry, he has worked with multiple global consulting and technology firms. Before joining Everest Group, Dheeraj held key consulting roles at Accenture Strategy, Wipro BPS, and TCS, contributing to their BFSI, Telecom, and IT practices.
Everest Group is a leading global research firm helping business leaders make confident decisions. We guide clients through today’s market challenges and strengthen their strategies by applying contextualised problem-solving to their unique situations. This drives maximised operational and financial performance and transformative experiences. Our deep expertise and tenacious research focused on technology, business processes, and engineering through the lenses of talent, sustainability, and sourcing deliver precise and action-oriented guidance. Find further details and in-depth content at www.everestgrp.com.
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