Artificial intelligence is rapidly reshaping the fraud landscape, and South African banking leaders are the most concerned globally, according to a new survey of fraud, anti-money laundering and risk and compliance leaders in 25 countries.
The survey of 1,440 leaders – including 80 South Africans – found that 96% of South African respondents say AI has already increased the sophistication of fraud and scam schemes, while 86% identified AI agents as the industry's most exploitable vulnerability for the next year. Globally, 80% of organizations have already reported facing attacks involving agentic AI.
The findings are part of BioCatch's “The Future of Digital Trust” survey, commissioned by the behavioral intelligence firm to explore how financial institutions are responding to the growing threats of fraud, the growing impact of AI and the role of collaboration in strengthening financial crime prevention.
South African respondents report particularly high levels of concern about the impact of AI on fraud detection in the coming years. Four in five (80%) believe it will be too challenging to distinguish legitimate AI-assisted actions from malicious or manipulated activity, while 64% expect widespread AI-mediated banking to reduce the effectiveness of traditional fraud signals.
“AI is beginning to reshape the way customers interact with e-commerce sites and financial institutions and will transform the way criminals commit fraud and other financial crimes,” said Jonathan Frost, director of BioCatch Global Advisory. “As digital interactions become faster, more automated and increasingly driven by agents, we must move beyond static identity checks and move toward a deeper and more immediate understanding of behavior, intent, and trust.” Professionals surveyed pointed out that AI is particularly increasing many types of fraud, including deepfake-enabled social engineering, automated phishing, and automated money laundering and transaction fraud.
The survey also highlights the growing financial impact of fraud on South African institutions. Nearly four in five respondents (78%) say fraud attempts are increasing in their organization, while 79% report increasing fraud losses. Nearly half (44%) estimate that their organization loses more than $10 million annually due to fraud, while nearly a third (29%) reported losing more than $25 million per year. In addition to institutional losses, 45% estimate that their customers lose more than $5 million annually due to authorized fraud and scams, while 20% estimate customer losses exceed $25 million each year.
Fraud is also increasing. 98% of South African banking leaders say they are very concerned about the increasing pace of fraudulent activity – significantly higher than the global average of 76%. Today's criminal networks are unrestrained by the regulatory requirements imposed on legitimate businesses, allowing them to grow rapidly using emerging technologies. More than half (59%) of those surveyed globally say criminal enterprises are growing faster than financial institutions.
The use of agents in retail banking makes it even more difficult for institutions to differentiate between genuine and fraudulent sessions. In an agentic future, banks must be able to differentiate between a legitimate user performing legitimate activity, a fraudster taking over the legitimate user's account, and a legitimate user under the instruction or manipulation of a scammer. They will also need to differentiate between genuine users who employ agents for legitimate banking and fraudsters who use agents for fraudulent activity. More than four in five (80%) of South African respondents say it will be very challenging in the future to distinguish legitimate AI-assisted actions from malicious or manipulated AI activity, compared to 72% globally.
Against this backdrop, South African banking leaders are placing greater importance on collaboration and intelligence sharing. More than nine in 10 South African respondents (91%) believe that interbank intelligence sharing would have a significant positive impact on their ability to prevent fraud and financial crime. The same proportion say that access to real-time intelligence of accounts involved in transactions would significantly improve their ability to identify and prevent scam attempts that evade traditional defenses. The findings reflect South Africa's long-standing recognition of the value of collective action in combating organized financial crime, including through industry-wide collaboration initiatives such as SABRIC.
The survey made several other notable South African findings. South Africa recorded the highest proportion of respondents globally (49%) who believe identity verification and authentication would benefit most from internal agentic AI tools, compared to the global average of 27%. South African banks appear to be outperforming many global peers in identifying accounts early in the laundering process, with 39% saying they typically detect mule accounts before receiving any incoming payments, compared to the global average of 20%.
The findings underline the extent to which South African banking leaders view AI-driven fraud, intelligence-sharing and collaboration as central to the future of fraud prevention and digital trust.