Financial institutions are rating their fraud defences far higher than their actual capabilities justify, according to a new index from Feedzai, which surveyed more than 1,000 senior fraud leaders across 12 countries.
The report, Confidence & Capability: The Feedzai Fraud Readiness Index 2026, found that banks and FinTech firms gave themselves an average readiness score of 80.2 out of 100. When their real strengths in data, AI, intelligence sharing and fraud team operations were assessed, that figure fell to 66.9.
The 13.3-point shortfall suggests that institutions understand the threat posed by AI-enabled fraud and are working to address it, but their execution has yet to catch up with their ambitions.
Funding does not appear to be the limiting factor. Some 96% of respondents anticipate that spending on AI-powered fraud tools will rise over the coming two years. Operational basics remain the sticking point.
The most widespread complaint, cited by 73% of leaders, was that analysts lose too much time gathering data by hand from disparate systems rather than investigating threats. Just 41% reported fully integrated data across their fraud, anti-money laundering, compliance and cybersecurity functions.
The practical consequence is that an analyst reviewing a suspect transaction may need to consult multiple platforms before building a complete view of the customer, delaying action against fraud. The report identifies stronger data integration, adoption of more advanced AI tools such as agents, and less manual data collection as the main areas for improvement.
Collaboration is gaining ground. Scams, in which criminals manipulate victims into transferring money themselves, now account for the largest share of fraud losses in 10 of the 12 markets covered. In response, 87% of institutions said they would consider securely exchanging fraud intelligence with peers, including direct rivals, a shift that would once have seemed unlikely.
Only 25.5% of institutions reached the index’s top “leading” tier, scoring 76 or above. These firms distinguished themselves by prioritising connected data and giving analysts more time for investigative work.
The industry’s overall score stood at 69.3, with 73% of institutions placed in the “Capable” tier, covering scores from 51 to 75. Adoption of agentic AI is also advancing, with 68% either using or planning it for three or more fraud use cases, although trust in autonomous decision-making remains their leading concern.
Feedzai co-founder, chairman and CEO Nuno Sebastião said, “Banks aren’t short on ambition or budget. What’s holding them back is inefficiency: data that doesn’t connect and analysts spending their day hunting for information instead of stopping fraud with modern technology such as AI.
“Criminals don’t target one bank at a time, so the industry can’t defend itself one bank at a time either. The fact that most institutions would consider sharing intelligence with their competitors shows how much has changed in the fight against fraud.”
Copyright © 2026 RegTech Analyst
Copyright © 2026 RegTech Analyst
