AI-enabled fraud is advancing faster than organisations can keep up

A recent survey conducted by The Payments Association, the trade association for the payments industry, found that 76% of respondents who have encountered AI-enabled fraud say it is increasing faster than their organisation can respond. This represents the largest perceived response gap of any financial crime risks examined in the research.

The UK Financial Crime Pulse 2026 draws on a recent Opinium survey of 100 senior UK financial services decision-makers across financial crime, fraud, risk, compliance and related functions. It finds that although authorised push payment (APP) fraud, in which someone is tricked into voluntarily sending money to a criminal, is not the most commonly experienced form of financial crime, respondents rate it as the most severe challenge facing their financial crime function. By contrast, insider fraud is the most widespread risk, reported by 78% of respondents, although only 35% describe it as a major challenge.

Despite the pace of AI-enabled fraud, only half of respondents say AI fraud prevention is among their organisations’ investment priorities for the next 12 months.

Additionally, 41% say AI governance is the area of financial crime that most lacks practical implementation guidance across the industry, ahead of crypto compliance at 37%. Together, these findings suggest organisations are struggling to keep pace with the governance and implementation challenges posed by AI-enabled financial crime.

Although financial crime affects the entire sector, the pressures differ by organisation type. Banks are more likely to identify digital identity and KYC weaknesses as the most significant risk they have experienced, with 63% selecting this issue. Fintechs, meanwhile, are more likely to identify fraud prevention as their leading source of operational uncertainty.

The findings will be discussed at The Payments Association’s Financial Crime 360 conference on 2 November 2026, where industry leaders, regulators and technology providers will examine the challenges highlighted in the report.

Emma Banymandhub, CEO of The Payments Association, said: “Each type of fraud requires a tailored response, and that depends on effective data and intelligence sharing across the industry. While 73% rate data-sharing limitations as a major or moderate challenge, only eight of the 37 respondents who describe it as a major challenge are investing in the infrastructure needed to address it. That gap should concern the entire industry.

“Our findings show just how quickly AI-enabled fraud is evolving, while exposure to financial crime has become almost universal across the sector. As fraudsters become more sophisticated, organisations must work together to strengthen prevention, improve intelligence sharing and respond more quickly to emerging threats.”