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Larger FIs More Likely to Use AI and ML to Fight Financial Crime
Financial institutions (FIs) are increasingly recognizing the importance of fraud-fighting technologies as they confront more sophisticated fraud and financial crimes. In fact, the surge in digital banking and faster digital payment methods has intensified this phenomenon, prompting banks to strengthen their systems and processes to tackle fraudulent transactions and the resulting financial losses.
According to findings detailed in “Increasing Fraud Heightens Need for Newer, Better Technologies,” a report by PYMNTS Intelligence, 43% of FIs reported an increase in fraud in 2023 compared to the previous year. Moreover, FIs with assets of $5 billion or more saw the average cost of fraud rise by 65% between 2022 and 2023, from $2.3 million to $3.8 million.
Overall, over 40% of banks in the U.S. observed an increase in fraud during the same period, resulting in a surge in major fraudulent transactions and financial losses.