84% of Indian banking leaders report rising fraud losses, AI-driven threats emerge as major concern: Report
Mumbai, June 11
As artificial intelligence increasingly reshapes the financial sector, Indian banks are facing a sharp rise in fraud-related challenges, with 84 per cent of banking leaders reporting higher fraud losses over the past year, according to a survey report by BioCatch.
The survey, which covered 1,440 fraud-management, anti-money laundering (AML), and risk and compliance leaders across 25 countries, found that India has emerged as one of the most concerned and heavily impacted markets when it comes to financial fraud and AI-enabled threats.
It stated "84 per cent of respondents recognize AI agents as the industry's greatest exploitable vulnerability in the next year"
The survey report also mentioned that among the 100 banking and financial crime prevention leaders surveyed in India, 90 per cent said fraud attempts at their institutions have increased over the past year, significantly higher than the global average of 81 per cent. The figure marks a sharp rise from 70 per cent recorded in India in the 2025 survey.
It also showed that 84 per cent of Indian banking leaders reported rising fraud losses, compared with the global average of 76 per cent. This is a substantial increase from last year's survey, when only 57 per cent of respondents in India reported increasing fraud losses.
The report highlighted growing concerns around the role of artificial intelligence in financial fraud. According to the survey, 93 per cent of Indian respondents believe AI has increased the sophistication of fraud and scam schemes, while 90 per cent said it will be very challenging to distinguish between legitimate AI-assisted actions and malicious or manipulated activity in the future.
Indian banking leaders also ranked among the most concerned globally about the speed of fraudulent activity. As many as 95 per cent of respondents said they are very concerned about the increasing speed of fraud, compared with the global average of 76 per cent.
The survey found that fraud has a significant financial impact on institutions. About 48 per cent of Indian respondents said their institutions lose more than USD 10 million to fraud annually. Of these, 32 per cent reported losses exceeding USD 25 million, 16 per cent reported losses above USD 50 million, and 6 per cent said losses exceeded USD 100 million each year.
Customer losses linked to scams and authorised fraud are also substantial. The survey showed that 58 per cent of respondents estimated their customers lose more than USD 5 million annually to scams, while 44 per cent reported losses above USD 10 million.
The report also pointed to instant payment platforms as a major driver of fraud. Nearly 66 per cent of Indian banking leaders identified scam attempts through instant payment systems as the primary source of rising fraud, higher than the global average of 59 per cent. The survey noted that India's rapid adoption of UPI may be creating new opportunities for fraudsters.
Commenting on the findings, BioCatch Chief Executive Officer Gadi Mazor said, "AI is starting to reshape how customers interact with e-commerce sites and financial institutions and will change how criminals execute fraud and other financial crimes."
He added that as digital interactions become faster, more automated and increasingly driven by AI agents, the industry must move beyond traditional identity checks and focus on understanding behaviour, intent and trust to effectively combat future fraud threats.
— ANI
Reader Comments
Interesting report. I work in fintech in Bangalore and we've seen a 40% increase in phishing attempts targeting our customers this year. The AI angle is real - we're now using AI to detect AI-generated fraud patterns. It's an arms race, and unfortunately the criminals are innovating faster than regulation.
Banks need to do more than just report these numbers. How many times have we heard about people losing their life savings to online scams? The RBI should mandate stronger authentication for high-value UPI transactions above a certain limit. Prevention is better than compensation schemes that never pay out fully.
The RBI recently flagged this too. AI-generated voice cloning scams are the new threat. Someone called my friend's mother sounding exactly like her son, asking for money. She transferred before realising it was fake. Banks must invest in systems that can flag unusual patterns in real-time, not just after the money is gone.
These loss figures are staggering. 32% of Indian banks losing over $25 million annually?! That's unacceptable. I moved back from the US to Pune last year and was shocked at how casually people share OTPs and passwords. The education gap is huge. Banks should partner with telecom companies to send SMS alerts about common scams.
The report rightly points to UPI as a weak point. It's too convenient for fraudsters as well. While I love the ease of UPI payments, I've stopped using it for large amounts. The 24-hour reversal window is not enough - banks need 48-72 hours for suspicious transactions to be investigated. Lives are being ruined by these scams. 😔