Majority of Bank Fraud Committed by Professional Fraud Rings, New Report Finds

2025 State of Fraud Report from Alloy finds that fraud events are rising steadily; financial criminals and fraud rings are the main culprits behind attacks

NEW YORK, Jan. 28, 2025 /PRNewswire/ -- Fraud professionals overwhelmingly agree (71%) that the majority of fraud attacks were committed by financial criminals and fraud rings in 2024, according to Alloy's latest State of Fraud Report. The report tracks shifting trends in financial fraud, based on a survey of nearly 500 senior-level fraud decision-makers working at banks, credit unions, and fintechs in the U.S.

Alloy's study comes following new information revealing that losses resulting from fraudulent Paycheck Protection Program (PPP) loans and fraudulent unemployment claims totaled $255 billion, far higher than the U.S. federal government's initial estimate of $100 billion, according to the December 2024 report from the U.S. House Select Subcommittee on the Coronavirus.

This year's data from Alloy indicates that financial institutions are better understanding how fraud is committed, as decision-makers at financial organizations ramp up efforts to detect and combat attacks.

"In the last four years, we saw a massive uptick in organized financial crime, driven by PPP loan fraud that helped fund criminal organizations who then systematically targeted FIs and fintechs," said Alloy Co-Founder and CEO Tommy Nicholas. "But it has taken these companies time to accurately understand who is responsible for these attacks, because, at first glance, it can look like a regular person woke up one day and decided to commit a crime (first party fraud). Understanding that most fraud is actually coming from organized crime rings has caused a big shift in how the financial services industry fights bad actors."

Fraud continued to rise across both consumer and business accounts in 2024, according to 60% of respondents in the report, with 31% of financial organizations incurring over $1 million in direct fraud losses.

Unsurprisingly, 93% of financial organizations are planning to make ongoing investments in fraud prevention in 2025, with 64% planning to implement an identity risk solution. 

Although 93% of respondents believe that AI will be game-changing for detecting and preventing fraud, expectations for AI will be much more grounded in 2025 than the year prior, Nicholas predicted.

"This year will see fewer overhyped promises about AI and more tangible applications of machine learning to address fraud in real-time," Nicholas said. "Rather than relying on standalone AI tools, financial organizations will shift their focus to investing in platforms that centralize identity and fraud risk across their organizations."

Other key findings include:

• Fraud has grown the most among enterprise banks – banks with greater than $50B in assets – with nearly 70% reporting an increase in fraud events.
• 90% of respondents invest just as much time in preventing fraud in branches and other physical channels as they do in preventing fraud on digital channels.
• 62% of respondents are increasing their investment in fraud prevention as a result of recent regulatory scrutiny.

The survey was comprised of responses from 486 decision-makers working at a director-level role or higher in the financial services industry across the enterprise banking, mid-market banking, credit union, and fintech sectors. The report was conducted on behalf of Alloy by The Harris Poll, a global consulting and market research firm.

About Alloy

Alloy provides an Identity and Fraud Prevention Platform that enables global financial institutions and fintechs to manage identity risk so they can grow with confidence. Over 600 of the world's largest financial institutions and fintechs turn to Alloy's end-to-end platform to access actionable intelligence and the broadest network of data sources across the industry, as well as stay ahead of fraud, credit, and compliance risks. Founded in 2015, Alloy is powering the delivery of great financial products to more customers around the world.

Contacts
Alloy
Larissa Padden
202-841-4419
[email protected]

SOURCE Alloy