Survey of more than 125 financial institutions finds leaders turning to investments in customer education and peer collaboration as fraud shifts toward people.

Financial institutions increasingly understand fraud as a human problem as much as a technical one, according to the 2026 State of Fraud Prevention Survey released today by ProSight Financial Association. Asked where the most preventable fraud losses occur, respondents cited customer and employee fraud-awareness gaps (62% and 49%) more often than any individual channel or system as the source of preventable losses, a reflection of how deliberately attackers have shifted toward targeting people.

Key findings

• Budgets are rising, though the threats are rising faster. More than half of respondents (53%) increased fraud prevention budgets by at least 5% in the most recent fiscal year. Even so, 85% said the threat environment is changing faster than they can respond.
• The constraints are operational. Financial institutions are struggling to operationalize fraud prevention fast enough. Alert overload (64%) and data quality (62%) were cited more often than budget constraints (51%) as limits on anti-fraud programs.
• Investment still favors technology. Over the next three years, the largest planned increases are in identity verification (46%), real-time payment controls (43%), and AI and machine learning tools (41%). Internal staffing ranked last of eight areas, at 8%.
• The oldest threat is also the fastest-growing. Check fraud is both the largest source of loss exposure (58%) and the fastest-growing fraud type (46%), while authorized push payment scams rank second in terms of fastest growth (40%).
• The appetite to collaborate is still evolving. Nearly two-thirds (64%) are very interested in deeper information sharing with peer institutions. However, after a notable incident, only 24% share with peers directly and 20% through formal industry networks. 71% do report to law enforcement.
• Customer awareness is being funded as a fraud control. The best chance to stop fraud comes before a customer moves their money. 87% of respondents plan to increase investment in customer education, and 77% already use direct customer communications in their fraud-prevention efforts.

"Banking institutions have spent years hardening their digital channels, and criminals have adjusted," said Jason Bartolacci, Director, ProSight Fraud Alert Network. "They are going after the customer directly through bank and law enforcement impersonation scams. When a customer authorizes the payment themselves, a detection model has far less to work with. You are asking technology to catch a decision that a person has already made, which makes the solution increasingly difficult for the institution."

The findings illustrate that what slows institutions down is capacity, not investment in solutions. There are more alerts than people to review them, the data feeding those systems can be unreliable, and getting separate systems to talk to each other takes time. “These are problems institutions are unlikely to solve one at a time, which is part of why we've seen such a strong appetite for working with peers. Our role is to be the trusted place where that occurs," said Jen Guidi, Chief Executive Officer of ProSight Financial Association.

Timelines have also changed. Scams that convince customers to send money are among the fastest-growing types of fraud. Real-time payments clear in seconds and cannot be reversed, making recovery much harder than it used to be. This puts the emphasis on spotting a scheme before it reaches the bank.

"Fraud is a network problem," Bartolacci added. "No single institution sees the whole picture, and the schemes that do the most damage usually hit several institutions before anyone connects them. Fraud teams understand that. The ProSight Fraud Alert Network was built to help the industry combat these threats together by creating a vetted place where fraud professionals can learn about these fast-evolving threats from each other before those threats spread."

The survey captured the views of more than 125 executives at North American financial institutions and was fielded from late June to early August 2026. The full report is available HERE.

About the ProSight Fraud Alert Network

The ProSight Fraud Alert Network is a digital community and knowledge network for authenticated fraud professionals at financial institutions and direct-to-consumer fintechs, offering timely fraud intelligence, direct peer collaboration, and a curated library of research, best practices, and consumer education materials.

About ProSight Financial Association

ProSight Financial Association empowers financial services leaders to act with confidence to strengthen and advance the industry. ProSight was formed through the merger of BAI and RMA, both trusted organizations with rich histories and deep expertise in risk, compliance, fraud, retail and commercial banking. ProSight supports leaders during times of great change, providing insights, tools, and analytics leading to new opportunities for growth. Our work creates positive ripple effects throughout organizations and the industry, ultimately helping consumers, businesses, and communities thrive. Learn more at prosightfa.org.

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