Half of U.S. and Canadian Financial Institutions Still Depend on Manual Tools as Bots and Scams Escalate
Fraud is widespread, difficult to measure, and even harder to prevent, according to the latest LexisNexis True Cost of Fraud Study 2025 North America. The eighth annual report from LexisNexis Risk Solutions reveals that fraud costs are hitting record highs, with nearly half of financial institutions still relying on manual processes instead of adopting automation and AI.
One of the most striking findings is the continued rise of the LexisNexis Fraud Multiplier, which calculates the hidden costs of fraud across operations, compliance, reputation, and customer trust. For every dollar lost to fraud, financial institutions now face more than $5 in total costs up 25% from just four years ago. U.S. financial services firms currently face an average of $5.75 per dollar lost, while Canadian institutions see nearly $5 in related costs.
Financial Technology Insights: Monroe Capital Backs Growth of Narrative Strategies
Fraud vulnerabilities appear at every stage of the customer journey. In the U.S., 30% of fraud occurs during new account creation, 31% within transaction activity, and 39% at account login or access. Yet many organizations still fail to measure fraud comprehensively. Only 45% of institutions track fraud across both payment methods and channels, leaving significant blind spots.
A deeper issue lies in how fraud is managed. Forty-four percent of financial institutions continue to rely mostly or entirely on manual processes, while just 20% have mostly or fully automated systems. As fraudsters become more sophisticated, institutions that avoid modernization are increasingly at risk of falling behind in both prevention and customer protection.
Financial Technology Insights: Fifth Third to Oversee Direct Express Benefits Program
“Fraud is a dynamic, escalating threat that touches every corner of a financial institution’s operations,” said Kimberly Sutherland, global head of fraud and identity at LexisNexis Risk Solutions. “Our study shows that while fraud losses are climbing, many organizations still depend on manual processes that can’t keep pace with today’s sophisticated attacks. The institutions with the lowest fraud costs are those adopting automation, AI, and cross-channel visibility through a multi-layered approach. They not only catch more fraud faster but also preserve a smoother experience for genuine customers.”
The study highlights several growing threats. Scams now account for more than a third of total fraud losses, malicious bots are increasingly undermining identity verification, and mobile fraud is on the rise particularly in the U.S., where 70% of financial institutions reported at least a 10% increase in mobile fraud over the past year. At the same time, fraud controls themselves are straining customer relationships. More than 70% of U.S. and Canadian lenders reported higher customer attrition due to their fraud prevention strategies.
Financial Technology Insights: Mastercard Launches AI-Powered Tools for Smarter Payments
Still, the report shows that “fraud-mature” organizations those investing in automation and future-focused strategies are seeing better results. These institutions reduced customer churn by nearly 30% over the past year and strengthened their defenses against increasingly complex attacks.
The study, conducted in April and May 2025 with 507 risk and fraud executives across the U.S. and Canada, paints a clear picture: fraud continues to evolve rapidly, but institutions that embrace automation, AI, and real-time monitoring are best positioned to protect both their business and their customers in an era of digital finance.
To share your insights with the FinTech Newsroom, please write to us at sudipto@intentamplify.com