Banking's strong safeguards, regulations lower exposure to verification-request fraud

Among industries with high remote-onboarding volumes, the banking sector stands out for having the lowest exposure to verification-request fraud. In the first half of 2026, 4.24% of verification requests in the banking sector were flagged as fraudulent, according to the Identity Fraud Report 2026 released Sept. 8 by AI-powered identity verification solution provider Shufti . [caption id="attachment_57389245" align="alignright" width="300"] (AI generated)[/caption] "The rules we have in the onboarding flows for the banking sector, as compared to the crypto and other sectors, are very strict," Shufti Chief Technology Officer Faryam Asif told FinAi News . The banking industry has more guards in place against fraud and faces higher regulatory standards, though sectors like crypto and foreign exchange are becoming increasingly regulated, he said. The crypto sector had the highest exposure at 22.49%, according to the report. Fraud is growing in crypto and e-commerce as more people use them, Asif said. U.S. cryptocurrency ownership grew in 2026 to about 30% of the population, up from 27% in 2024, according to the 2026 Cryptocurrency Adoption and Sentiment Report, updated Sept. 17 by research group Security.org . And U.S. e-commerce sales reached $340.2 billion in the second quarter, up 12.2% from Q2 2025, according to the U.S. Census Bureau . Industries such as crypto and e-commerce focus heavily on the user experience and reducing friction, leading to less stringent guardrails, Asif said. "In the banking sector, they are more focused on making sure that they don't onboard any fraudulent user, so they make sure the journey has enough checks,” he said. “But in the other sectors, they are more focused toward onboarding as many customers as they can." Replay, injection attacks Banking also stood out when it came to fraud methods. Altered documents were the leading instrument for identity fraud in 10 of the 11 industries Shufti analyzed; however, replayed images and screenshots were the leading identity fraud instrument in banking. In replay attacks, identity thieves will use a person’s real information or documents in a live interaction with a bank, Asif said. When prompted for real-time proof of identity, a fraudster will hold a pre-recorded video or preexisting image in front of their camera. AI can detect altered documents by analyzing metadata but "the replay attack bypasses that, because the image is not an altered document," Asif said. "The attackers have become more and more intelligent," he said. "Now we are seeing a new thing we call injection attacks." In an injection attack involving camera feed manipulation, a fraudster bypasses a device’s physical camera lens and injects a fake image or pre-recorded video directly into the camera’s digital signal or software layer. Multilayered, continuous verification The best defense is a multilayered, continuous verification process, Asif said. This includes looking at a user's identification, devices, behavior and history. "The industry is moving toward continuous monitoring of the users they have already onboarded," Asif said. "There are many cases where account takeover exists, so there needs to be continuous monitoring to ensure that the behavior of the customer or the device signal of the customer or even the face of the customer we onboarded matches with the current action." FinAi Lending Summit, set for Oct. 7-8 in Las Vegas, will include speakers from Fifth Third and Capital One as well as a fireside chat with U.S. Bank Senior Vice President – Lending Operations Group Manager Suzanne Rathbun . To learn more about the 2026 event and register, visit here .

Banking’s strong safeguards, regulations lower exposure to verification-request fraud

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