Who's winning the fraud war? A three-part investigation into what banks get right

Are banks winning the war against fraud? In a three-part investigation, Mirela Ciobanu, Lead Editor at The Paypers, looks at what separates the institutions actually getting fraud prevention right from those simply publishing better numbers - from how fraud should be measured, to why the customer is often the person best placed to spot a scam in progress, to why no single bank can win this fight alone.

I always love the process of writing because it involves much more than working with words and stories. It means meeting people, reading interesting things, following a question - sometimes a quest - and seeing where it takes you. More often than not, the journey is packed with learnings, with what we call in Romanian morala unei povești: the moral of the story.

There is something of The Wizard of Oz in this. We often think of it as a children's tale, but a house lifted from the ground by a storm and a journey along the Yellow Brick Road are pretty good metaphors for growing up, too. Sometimes you have to accept the luxury of being in the middle of a storm, rather than being frightened or taken aback by it, and be willing to experience it. Then, somehow, the right people, opportunities, and situations appear along the road. You follow them - but with your own critical thinking and curiosity.

Perhaps that is also a useful mindset for the financial world. Money laundering, mule accounts, red flags, deception: everywhere we look, we are reminded that things are not always what they seem. The adage still applies: if something looks too good to be true, it probably is.

The story behind this series started with a conversation with Stephen Rae, Chair & Publisher at AML Intelligence. He challenged me to tell a story that was not simply another collection of industry buzzwords or information that could just as easily have been generated by AI, but something live: a story coming directly from the experience of people fighting fraud, and one that could actually teach us something.

And it seemed like the right question to ask. With so much attention focused on APP fraud, social engineering, investment scams, romance scams, crypto fraud, and increasingly sophisticated tactics, it is easy to concentrate on everything that is going wrong.

But in conversations with financial institutions, fraud professionals, and technology providers - and through what I have been reading - I have also come across banks and FIs that seem to be getting important parts of fraud prevention right.

They do not necessarily have fewer fraudsters knocking on their doors. They seem to be better at recognising risk, connecting information and, crucially, intervening before a loss occurs.

So I started wondering: what can we learn from the institutions that appear to be doing this well?

Or, perhaps more importantly, am I asking the right question?

I have heard it said that sometimes the answer is less important than asking the right question in the first place. And if the goal is to make the payments system safer in the face of huge levels of intentional and unknowing fraud, perhaps that is where we should start.

That question led to a series of conversations with experts across the fraud and financial crime community. Sometimes it was a three-bullet email exchange. Sometimes it was a recommendation to read a particular report. Sometimes it was a short call squeezed in between meetings with customers; other times, a longer conversation in the afternoon.

What struck me - or perhaps re-struck me, because I have felt it increasingly since becoming more engaged with the fincrime community - was the willingness to help. To share. To be there for the wider community. And, ultimately, the willingness to do some good. It may sound a little romanticised to say it, but there is a sense among many of the people I spoke to that they genuinely want to change the world, or at least make a small but meaningful part of it safer.

Thank you to the people who gave their time and candour to make this series possible:

• Rob Woods, Director of Fraud & Identity, LexisNexis Risk Solutions
• Chen Zamir, host of The Saturday Fraud Strategist and co-author of The Fraud Fighter's AI Playbook, Sardine
• Mike Nathan, Vice President, Professional Services International, LexisNexis Risk Solutions
• Uri Rivner, CEO, Refine Intelligence
• Trace Fooshee, Strategic Advisor, Fraud & AML practice, Datos Insights
• Tony Fish, author, investor, and regular contributor to The Paypers
• Laura Spiekerman, Co-Founder and President, Alloy
• Freddy Arthur, Fraud Strategy Leader for EMEA, NICE Actimize
• Emma Mohan, Chief Risk & Compliance Officer, Chip
• John Erik Setsaas, Independent Fraud and Identity Expert, contributor to Mobey Forum's Fraud Expert Group
• Mary Ann Miller, VP of Client Experience and Fraud and Cybercrime Advisor, Prove

This is a three-part investigation.

Part 1 asks whether the industry is even measuring the right thing. It pulls apart the reimbursement league tables, loss percentages, and vendor claims that everyone quotes; shows how the same numbers can support opposite conclusions; and maps the points in a customer's journey, from account opening to the moment a payment lands, where a scam can potentially be caught before the money moves.

Part 2 argues that the customer is not just a transaction to monitor. In some of the fastest-growing fraud types, the customer is often the person best placed to know that something is wrong while the scam is happening. The article looks at what it takes to listen to them: human intervention teams, AI trained to detect coercion in conversations, and the uncomfortable reality that distinguishing a genuine victim from someone knowingly participating in a fraud can be harder than banks would like.

Part 3 takes on the question the first two parts build towards: if a scam rarely starts inside a bank's walls - if it begins on a social platform, with a spoofed call, or through a fake dating profile - why does so much of the liability still end there? It compares how the UK, Australia, Singapore, and the US answer that question differently and looks at what real cross-sector collaboration looks like in the rare cases where it happens.

Tomorrow (Sept. 8) we’ll start where the industry starts: with the numbers everyone uses to prove they're winning.

About author

Mirela Ciobanu is Lead Editor, Banking and Fintech at The Paypers, focusing on the latest trends and developments in fraud, cybersecurity, and technology (generative AI, blockchain analytics, data, etc.). Mirela is particularly passionate about the importance of having interoperable digital identity solutions that help not only to secure payments but also transactions in other areas of life (travel, health, education). She is a strong advocate for online data privacy and protection.

As a skilled writer, she strives to deliver accurate and informative insights to her readers, always in pursuit of the most compelling version of the truth. To share more ideas and get inspired, connect with Mirela on LinkedIn or reach out via email at mirelac@thepaypers.com.