As fraudsters continue to adapt and scale their attacks, more than half of all banks are now leveraging artificial intelligence (AI) to fight back.

Fifty-seven percent of banks are using AI to beef up their anti-money laundering (AML) and Know Your Customer (KYC) processes, according to a report released last week by IT consultancy NTT Data. Fifty-five percent of banks surveyed report an accelerated digitization of their AML and KYC processes, while 54% use an automated partner for their compliance needs.

“There is a generational shift happening in almost every industry currently, but especially in banking, which is dictating the future of corporate banking,” Matt Provencher, president of financial services and insurance at NTT DATA Services said in a release. “The pace of change in banking is increasing, as banks are investing in new technologies such as AI and automation, being driven by customer demand.”

Additional findings from the report include:

• Three times the number of corporate clients want to communicate with banks through application programming interfaces (APIs) rather than emails or face-to-face interactions;
• 85% of banks are looking at rationalizing or merging their digital portals;
• 38% of U.S. bank clients report a “seamless” automated onboarding process;
• 61% of banks are building an in-house digital cash forecasting solution;
• Twice as many Asian and Pacific (APAC) banks are investing in AI compared to U.S. banks; and
• 44% of banks are prioritizing sustainable IT investments.

Fraud attacks shoot up 233% between 2019 and 2021

A new report from cybersecurity fintech Feedzai showed that digital fraud grew even faster than digital transactions in 2021.

Echoing thoughts from across the cybersecurity and risk management industry, the Feedzai report showed that fraudsters enjoyed a “best case scenario” in 2021. While online transactions grew by 65% between 2019 and 2021, fraud attacks increased by a massive 233%, according to the report.

Additionally, fraudsters found new ways to develop and test their attacks, reflected by a 794% increase in digital entertainment fraud attacks between 2019 and 2021, with the report citing digital entertainment’s volume of low-value transactions as a perfect testing ground for card scams.

Other findings from the Feedzai report include:

• Account takeover (ATO) fraud and social engineering scams, which trick victims into sending personally identifiable information (PII), topped the list of fraud types in 2021;
• Online games, video streaming platforms and computer services facilitate the highest number of card scams;
• Cash withdrawals saw a 75% decrease between 2019 and 2021; and
• Mobile banking in the U.K. produced 50% less fraud than all other types of banking combined.

48% of financial institutions fully automate account opening

Only 48% of banks and financial institutions offer fully automated account opening for their business customers, according to a report released last week from research consultancy CCG Catalyst Consulting.

Workflow complexities have led business account opening to lag behind that of retail banking, the report states. Account decisioning, KYC and document handling processes are difficult to repeat and automate across digital channels, and end-to-end process automation without any level of human activity remains rare.

While 48% of financial institutions automate business account opening, an additional 48% offer similar services but may require an in-person visit. Six percent of institutions do not currently offer capabilities but plan to, while another 6% do not list any plans for implementation.