A recent survey by BioCatch has revealed growing concerns among Indian banks over a sharp rise in fraud attempts, with artificial intelligence (AI)-enabled scams and instant payment systems such as UPI emerging as major risk factors.
According to the survey, 90 per cent of Indian banking leaders reported an increase in fraud attempts at their institutions over the past year, significantly higher than the global average of 81 per cent. The findings indicate a substantial rise compared to the previous year’s survey.
The report further noted that 84 per cent of respondents identified AI agents as one of the most significant vulnerabilities that could be exploited by fraudsters in the coming year. Additionally, 93 per cent of banking leaders believe AI has enhanced the sophistication of fraud schemes, making them more difficult to detect and prevent.
Concerns over the speed of fraudulent transactions are also mounting. Nearly 95 per cent of respondents expressed serious concern about the rapid execution of fraud, compared to the global average of 76 per cent.
The survey highlighted the financial impact of fraud on banking institutions, with almost half of the respondents stating that their organisations lose more than USD 10 million annually due to fraudulent activities. Customer losses from scams and authorised fraud were also reported to be significant.
Instant payment platforms were identified as a major contributor to the rise in fraud. Around 66 per cent of Indian banking leaders cited scam attempts through instant payment systems as a key challenge, suggesting that the rapid adoption of UPI has created new opportunities for cybercriminals.
Commenting on the findings, BioCatch Chief Executive Officer Gadi Mazor said that AI is transforming customer interactions with financial institutions while simultaneously providing fraudsters with new tools to conduct financial crimes. He emphasised the need for banks to move beyond traditional identity verification methods and adopt behavioural intelligence-based approaches to better assess trust, intent and risk in an increasingly AI-driven digital ecosystem.
