New Survey Reveals Fraud Surge Sweeping Financial Institutions

A comprehensive survey of financial professionals has exposed a fraud epidemic sweeping through banking institutions, with nine in ten reporting increased fraud attempts over the past year and nearly all experiencing revenue losses as a result. The research highlights how phishing, smishing, and payment scams have become pervasive threats that are not only draining institutional resources but eroding fundamental customer trust in the financial system.

Background and Context

The findings emerge from survey data collected from more than 200 U.S.-based financial professionals directly responsible for fraud prevention at their institutions. The research specifically assessed fraud prevalence, common attack vectors, and impacts on institutional reputation, compliance burdens, and financial performance. The results paint a stark picture of an industry under sustained assault from increasingly sophisticated criminal enterprises.

Financial fraud has evolved from opportunistic attacks into systematic campaigns targeting institutions' weakest points. The survey reveals that fraud has transcended from a periodic concern to a permanent operational challenge requiring continuous monitoring and investment. This shift reflects broader trends in digital finance, where expanding technological capabilities have created new vulnerabilities that fraudsters have been quick to exploit.

Key Figures and Entities

According to the survey data, phishing attacks have reached near-universal prevalence, affecting 98% of financial institutions. Following closely behind, smishing—fraudulent text messaging—was reported by 76% of institutions, while payment scams affected 75%. Additional threats identified include vishing (voice phishing), robocalls, spoofing, and various impersonation schemes that target both institutional systems and customers directly.

The financial impact of this fraud surge is substantial. Nearly every institution surveyed (99%) reported losing revenue to fraud, with most experiencing losses equivalent to up to 5% of their annual revenue. Beyond direct financial losses, 80% of institutions reported increased security costs, while 60% faced higher compliance expenses as they struggled to meet regulatory requirements while combating fraud.

Legal and Financial Mechanisms

In response to these escalating threats, financial institutions are prioritizing telecom asset management as a frontline defense mechanism. The survey found that 99% of institutions are now prioritizing telecom asset management, with 86% classifying fraud prevention within this domain as a major priority. This approach focuses on securing the communication channels through which many fraud attacks are conducted.

Institutions are also directing attention toward regulatory compliance (55%) and upgrading legacy systems (54%) as additional critical areas in their fraud prevention strategies. Despite these varied approaches, fraud prevention remains the top focus across the sector, reflecting the severity and persistence of the threat.

International Implications and Policy Response

Beyond the direct financial impacts, the survey reveals that more than half of institutions believe fraud has damaged customer trust—potentially the most concerning long-term consequence of the fraud surge. This erosion of trust threatens the fundamental relationship between financial institutions and their clients, potentially impacting customer retention and acquisition for years to come.

The research suggests that addressing fraud effectively requires more than technological solutions—it demands industry-wide collaboration, transparency, and a shared commitment to safeguarding digital interactions. As fraud tactics continue to evolve, financial institutions face mounting pressure to develop more sophisticated prevention mechanisms while maintaining regulatory compliance and customer service standards.

Sources

This report draws on survey data from a study of more than 200 U.S.-based financial professionals involved in fraud prevention measures at their respective institutions. The research was conducted to assess fraud prevalence, common attack vectors, and institutional impacts across the financial sector between 2023-2024.