Introduction

Financial fraud is a fast-growing threat that cuts across sectors and borders, undermining financial stability and eroding consumer trust. This research provides a curated list of solutions demonstrating evidence of success in protecting consumers. The acceleration of technology, particularly artificial intelligence (AI), is reshaping the sector while introducing complex risks. Action is required across the entire fraud chain, from prevention and disruption to recovery. Robust foundational frameworks for consumer protection, data protection, and cybersecurity are critical starting points, though they involve trade-offs such as tensions between fraud protection and data privacy.

The need to tackle fraud in digital finance

The scale and complexity of fraud have increased significantly. In a 2025 survey, 59 per cent of financial sector authorities viewed fraud as their top consumer risk concern. Consumer exposure is widespread; over 60 per cent of digital financial services (DFS) users in Rwanda, Tanzania, Uganda, and Kenya received fraud attempts between 2022 and 2025. In Rwanda, 15 per cent of surveyed users lost money. Fraud is increasingly converging with cybersecurity issues, where cyberattacks compromise personal data that is subsequently used to defeat fraud controls. AI amplifies these risks through fraud-as-a-service models, enabling even low-skill actors to use synthetic identities. Identity fraud attempts surged 700 per cent between 2022 and 2025. Furthermore, social media plays a growing role, with 61 per cent of scams in Europe originating on Meta platforms.

Solutions to address fraud risks

Authorities and providers are implementing various solutions across four domains: education, prevention, detection/disruption, and response/recovery. Intelligence sharing and collaborative action are central, exemplified by government anti-scam command centres like Malaysia’s National Scam Response Centre (NSRC). The NSRC has cut investigation times by 70 per cent and increased fund-freezing success from 0.5 per cent to 30 per cent. India’s Digital Intelligence Platform (DIP) has prevented 5.5 million risky transactions, avoiding INR 2.28 billion in potential losses.

Monitoring fraudulent advertising is another key strategy. The UK’s Financial Conduct Authority (FCA) increased website scanning from 100,000 per day in 2021 to 480,000 in 2024, blocking more than 1,600 illegal websites. Telecom security standards are being enhanced through mandatory SIM registration and API-enabled network security architectures. In Kenya, Safaricom’s API suite reduced malicious SIM swap fraud to 0.0053 per cent. User authentication solutions, such as the State Bank of Vietnam’s mandatory biometric solutions, contributed to a 59 per cent drop in individual fraud cases and a 52 per cent reduction in mule accounts.

Positive frictions, such as the UK’s confirmation of payee (CoP) service, have led to a 53 per cent drop in misdirected payment claims. Behavioural biometrics and transaction pattern analysis allow banks to detect anomalies in milliseconds. Payment networks like Mastercard TRACE identify money mule activity, flagging over 100 potential mule accounts monthly in the Philippines. Fund recovery efforts include the UK’s mandatory reimbursement requirement, where 88 per cent of lost funds were reimbursed in the first year. Finally, consumer behavioural campaigns like Singapore’s “I can ACT against scams” contributed to a 26 per cent decrease in scams in the first half of 2025.

Considerations for next steps

While opportunities exist through global movements and AI, stakeholders must navigate trade-offs between fraud protection, consumer privacy, and financial inclusion. Aggressive antifraud measures may inadvertently exclude vulnerable groups lacking proper identification or mobile devices. Strengthening cross-border collaboration is vital, as fraudsters operate without borders. Regulatory convergence regarding data laws and enforcement mechanisms is necessary to make international cooperation faster and more accessible. Development agencies can play a critical role in creating low-cost, adaptable solutions for authorities in emerging markets.