Deloitte warns that generative AI will drive U.S. bank fraud losses to $40 billion by 2027 – an increasing trend supported by Allure Security’s data observing a 450% increase in online bank impersonations in 2024. Scam tools built on generative AI for sale on the dark web for as little as $20 enable fraudsters to quickly create targeted phishing messages, deceptive content, and malicious code for injection into mobile banking apps for example.

Scams and fraud seriously threaten account holders’ trust and loyalty. LexisNexis’s 2023 True Cost of Fraud study reports that 80% of financial institutions rank “reduced customer satisfaction” as the top impact of fraud, damaging customer relationships. Online impersonations and account takeover fraud increase customer churn, damage brand reputation, and increase operational costs. The LexisNexus Fraud Multiplier reveals that each dollar lost to fraud costs an additional $4.40 related to investigation labor, recovery expenses, fines, and legal fees.

Aberdeen Group reiterates the financial impact of online brand impersonation, finding the direct and indirect costs of account takeover fraud resulting from online brand impersonations cost banks 2.7% to 7.5% of annual revenue. With generative AI accelerating fraud and related costs, scams have become a “material business risk” rather than simply a cost of doing business.