New research commissioned by BioCatch has revealed that half of German banking fraud, AML, and compliance team leaders report increasing fraud losses at their organisations.
The US-based fraud prevention technology provider released survey findings on 11 February 2026. 65% of fraud team respondents and 67% of C-suite executives in German banking reported rising fraud losses. Additionally, 66% estimate their bank's annual fraud losses exceed USD 10 million.
More than half of surveyed German banking leaders believe fraud risk increased following the implementation of mandatory real-time SEPA payments in 2025. The Single Euro Payments Area Instant Credit Transfer regulation requires all eurozone payment service providers to offer instant euro transfers with settlement within seconds.
Investment in fraud controls despite confidence
Nearly three-fourths of respondents stated they believe current fraud controls are effective. However, 76% of German banking leaders reported their institution is considering upgrading existing controls. Of those, 11% have started procurement and implementation processes.
Thomas Peacock, Director of Global Fraud Intelligence at BioCatch, noted that German banking leaders appear to attribute part of this fraud increase to legislation. More than half of those surveyed in Germany believe fraud risk increased following real-time SEPA payment implementation.
Adding to this, Mathias Schollmeyer, Country Manager for Germany at BioCatch, stated that German banks face persistent fraud attempts, new vulnerabilities from instant payment expansion, accessible AI tools amplifying attack scale and precision, and organised criminal networks exploiting defence gaps. Financial institutions experience unprecedented pressure, with customers deserving preventive, trusted solutions for protection in the increasingly complex fraud landscape.
Manual review processes dominate operations
German respondents reported reviewing the majority of fraud cases manually, notably above the continental European average of 46%. Manual review processes involve human analysts examining flagged transactions, customer account activity, and alert data to determine fraud legitimacy.
Furthermore, 36% of the surveyed German banking leaders stated their bank currently reimburses at least half of customers who fall victim to scams, below European counterparts at 53% and the global average of 44%. Nearly three-fourths of respondents reported their bank taking proactive action to change reimbursement policies ahead of new requirements under the proposed Payment Services Directive 3 (PSD3) and Payment Services Regulation (PSR).
Readiness for AI-driven attacks
When it comes to AI, 84% of German banking leaders stated they feel their bank is prepared for agentic AI attacks. Agentic AI refers to autonomous systems capable of executing multi-step tasks, adapting behaviour based on outcomes, and operating with minimal human intervention.
German banks face regulatory obligations under the EU's Anti-Money Laundering Directives, Payment Services Directive 2, and national financial supervision frameworks administered by BaFin.
