Fight financial fraud in 2025 with omnichannel, AI-driven identity verification

A version of this article first appeared in the December BAI Executive Report: The 2025 banking landscape. Find more within the report as industry peers share the strategies and potential solutions for meeting customer needs, preparing for market uncertainty and streamlining operations to preserve margins.

Fraud is fast moving, global and more dynamic than ever. With businesses worldwide losing an estimated 5% of their annual revenues to fraud, it’s a rapidly growing profit-making machine for bad actors that puts every organization at risk.

The industrialization of fraud is driven in part by the emergence of generative artificial intelligence (gen AI), which has given criminals a path to work faster, scale attacks and create more believable scams. Fraud is taking place on an industrial scale, particularly as gen AI fuels new and familiar types, from phishing attacks to synthetic identity fraud.

Now more than ever, a well-rounded identity verification strategy is imperative in the fight against fraud, as GBG IDology’s Global Fraud Report – 9^th edition details. These three trends will be foundational as financial services providers look to lay out a 2025 strategy for fighting fraud.

Embrace AI-driven fraud protection

Gen AI is empowering fraudsters to work faster, across industries and with fewer resources, generating synthetic identities that are increasingly believable and difficult to detect. While synthetic identities have been a persistent problem, gen AI-created identities are a growing cause for concern.

While gen AI is used to escalate fraud tactics, its ability to quickly scrutinize vast volumes of digital data can also empower financial services providers, allowing them to fast-track trusted identities and escalate high-risk reviews. Additionally, using AI-powered predictive risk intelligence to monitor transactions and suspicious identities can reduce data leaks and fraud attempts.

But AI alone isn’t enough. AI requires oversight by human fraud experts who can spot novel forms of fraud that AI systems miss. Humans must bring transparency and continuous improvement to the learning model through constant input and refinement.

Protect against fraud across channels

Fraud is increasingly cross-channel. GBG IDology’s Global Fraud Report – 9th edition found that more than half of U.S. companies reported an overall increase in fraud across mobile, online, contact centers and in-person channels. As the fraudulent use of payment methods, accounts and identities exploits vulnerabilities in an interconnected system of online and offline channels, a multi-layered approach to identity verification is essential.

However, many financial services providers use single enterprise databases, which provide a limited view of wider fraud activity and behavioral trends. Instead, a fraud intelligence ecosystem allows providers to monitor suspicious activity across the enterprise and beyond in real-time. In EMEA, 70% of businesses leverage an identity intelligence network for cross-sector fraud data, a critical tool in combating multi-channel fraud. And globally, 81% of companies surveyed reported keen interest in participating in cross-industry networks to tighten up their customer onboarding and fraud protection practices.

Knowledge-sharing and cross-industry visibility are critical as fraudsters continue to expand their reach and grow their operations, jumping from industry to industry looking for vulnerabilities to exploit. Digital fraud doesn’t recognize national borders, isn’t limited to a single business, or remain within a single industry. Tracking repeat instances of identity data, high-risk transactions, suspicious activity and trends with a cross-industry identity network will help detect crossover fraud, provide a holistic view of evolving fraud trends and empower financial services providers to make more-informed decisions that improve efficiency, optimize cost and reduce risk.

Balance security and customer experience

The dueling priorities of security and convenience remain the ultimate challenge in building consumer trust with less risk. Executives and fraud analysts agree that balancing fraud with friction is the greatest challenge to fraud prevention.

Some 57% of companies believe quick and easy onboarding is most important to consumers, while 68% of consumers place greater importance on security during onboarding. Detecting and deterring fraud without negatively impacting the customer experience has brought digital identity verification to the forefront of strategic considerations for businesses of all sizes. However, companies worldwide struggle with increasingly complex identity verification protocols.​

We know that 43% of U.S. companies use multiple identity verification providers during onboarding. However, 86% believe having one vendor for identity verification and fraud protection is important for optimizing the customer experience. A single, modern platform with advanced authentication techniques, access to a robust and proven cross-industry network, and highly configurable workflows empower businesses to orchestrate digital journeys that apply the right verification step at the right time.

Anticipating what’s next

Do you know how much fraud is costing your business?

GBG IDology data shows that 46% of businesses are unsure of the average transaction dollar value of attempted fraud attacks within their organization. Of those who do know, 46% reported the average value of attempted fraudulent transactions was over $5,000. At the same time, the percentage of high-dollar-value fraudulent transactions ($50,000-plus) surged in 2024 compared to the previous years.

Understanding the full scope of fraud and its associated costs is essential for protecting the bottom line and building customer trust. Cross-industry intelligence, advanced identity verification and improved departmental communication are keys to curbing the cost of fraud. Successfully navigating evolving trends, investing in innovative technology and a comprehensive identity verification strategy will be critical in 2025 and beyond.

James Bruni is Managing Director at GBG IDology.