75% of financial institutions say fraudsters outpace defenders with generative AI; first-party fraud surges as top concern
DataVisor, the world’s leading AI-powered fraud and risk platform, released its 2025 Executive Report, highlighting the escalating challenges organizations face in combating sophisticated fraud schemes.
The report underscores a significant shift in the fraud landscape, with 75% of surveyed institutions acknowledging that bad actors are leveraging generative AI more effectively than legitimate organizations. From deepfakes to synthetic identities, criminals are exploiting emerging technologies faster than defenders can respond.
“AI has become a double-edged sword in fraud prevention,” said Yinglian Xie, CEO and Co-founder of DataVisor. “Fraudsters are innovating without regulation or legacy constraints, while organizations are still working to scale AI defensively. The institutions that move first—building AI governance, linking systems, and reducing manual effort—will define the new standard for fraud resilience.”
“The 2025 Fraud and AML Executive Report” draws on insights from banks, fintechs, credit unions, and digital platforms to map the evolving risk landscape. The findings are stark.
One of the most compelling findings is the surge in first-party fraud, now ranked the second-greatest challenge by 68.8% of decision-makers. The surge reflects a growing trend where legitimate account holders engage in deceptive practices, such as falsely disputing charges or claiming lost deliveries. As economic pressures rise and liability shifts from consumer to bank, the distinction between customer and criminal is blurring, necessitating more advanced detection methods.
"Identity alone is no longer a sufficient line of defense," the report notes. "When the fraudster is the legitimate account holder, detection requires going beyond verification—toward behavior monitoring, transactional intelligence, and adaptive risk models."
Compounding the issue, siloed operations and legacy infrastructure continue to slow down even the most sophisticated institutions. 75% cited system fragmentation as a top AML challenge, while 56% named false positives as the leading pain point in fraud operations. Yet there is growing momentum for convergence. Adoption of a unified FRAML (Fraud + AML) strategy is rising, with nearly 40% of organizations already implementing or planning integration within two years.
The report also underscores that institutions no longer need to choose between customer experience and security. With AI-powered real-time decisioning, more organizations are aiming to reduce losses and friction. “You can’t afford to choose anymore,” said Xie. “The best fraud prevention today is invisible to the customer.”
As Xie emphasized, “This is not just a technology race—it’s an organizational shift. The winners will be those who stop treating fraud as a backend risk and start embedding it into every layer of customer acquisition, onboarding, and transaction flow.”
The 2025 Executive Report is available now at www.datavisor.com.
About DataVisor
DataVisor is the leading AI-powered fraud and risk management platform, empowering financial institutions to detect and prevent modern fraud attacks in real time. Trusted by Fortune 500 companies and digital disruptors alike, DataVisor unifies fraud, AML, and risk operations into a single decisioning hub, safeguarding the entire customer lifecycle.
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