New fraud tactics and prevention strategies
By 2025, fraud will reach levels that demand cutting-edge solutions. Think about this: advanced push payment (APP) fraud has surged so much in the UK that new reimbursement policies were introduced to protect victims. But this comes with unintended consequences, first-party fraud, or “friendly fraud,” is expected to rise dramatically. If you’re in the payments space, this is a red flag you can’t ignore.
In order to combat this, we’re going to see a massive shift in fraud prevention technology. Artificial intelligence will lead the way, analyzing vast datasets in milliseconds to spot patterns human eyes would miss. Pair this with dark web insights, where fraudsters operate behind the scenes, and technologies like device fingerprinting, and you’ve got the foundation for a strong defense.
No single technology will be enough. Fraud is multi-faceted. That’s why a layered approach will be key. AI working alongside behavioral analytics, real-time monitoring, and human oversight will be the gold standard. And during high-traffic shopping periods like Black Friday? This layered defense will need to perform flawlessly under pressure.
Fraud prevention is a people problem. Collaboration between private entities, regulators, and consumers will be key. Businesses must educate their customers on recognizing phishing attempts and other scams. Regulators need to keep pace with emerging threats, and companies must build trust by staying transparent. Together, this triad of cooperation will make sure of a safer digital ecosystem.
AI’s expanding role in financial services
Artificial intelligence is changing financial services, and we’re just scratching the surface. Fraud detection, personalized financial products, and predictive analytics are already proving AI’s worth. By 2025, these applications will scale further, reshaping the industry as we know it.
AI adoption brings new challenges: privacy concerns, algorithmic bias, and accountability. Regulators are gearing up to address these issues, drafting frameworks that will balance innovation with consumer protection. Companies that anticipate these changes, rather than react to them, will be ahead of the curve.
The quality of your data determines the effectiveness of your AI. Feed it poor or fake data, and the results are unreliable, even dangerous. This makes comprehensive data governance non-negotiable. Companies will need airtight systems to make sure of the integrity of their data, to meet regulatory requirements and to maintain consumer trust.
Open banking’s global expansion
Open banking is becoming a global movement, and by 2025, it’s going to change how we think about financial services. Take the UK’s OBLv4 standards, the first major upgrade in years. Or the US’s Section 1033 of the Dodd-Frank Act, marking the country’s inaugural step into open banking legislation. Add to this the rapid advancements in MENA countries like Saudi Arabia and the UAE, and the trend is clear: open banking is here to stay.
What does this mean for businesses? Opportunity. In the UK, new consumer-focused applications will emerge, especially in areas like mortgages and sustainable finance. The US will start rolling out APIs, likely aligned with Financial Data Exchange (FDX) standards, creating a more connected and transparent financial ecosystem.
But this growth won’t be automatic. It will require investment in infrastructure, compliance, and consumer education. Banks and fintechs that embrace these changes will thrive.
The resilience of the mortgage market amid challenges
Despite the chaos of 2024, geopolitical shifts, fluctuating inflation, and skeptical consumers, the UK mortgage market is set for a resurgence in 2025. Why? Labour’s plan to build new homes will fuel demand, and the demographics of buyers are changing. Gen Z, with their side hustles and freelancing gigs, is entering the market. These buyers are different. They need mortgage products that reflect their unconventional income streams.
Traditional banks face a choice: adapt or risk irrelevance. Agile neo-banks are already developing niche products tailored to this demographic. Legacy institutions can’t afford to lag behind. Modernizing outdated systems will be key for these banks to compete and retain market share.
It’s a challenging time, no doubt. But for those willing to innovate, the rewards will be huge.
Consumer awareness is a key pillar in fraud prevention
No matter how advanced our technology becomes, scams like phishing will still rely on one thing: human error. That’s why consumer awareness will be just as important as any AI or cybersecurity tool.
Businesses have a responsibility here. Educating consumers on recognizing suspicious activity, verifying URLs, avoiding too-good-to-be-true offers, and staying skeptical, will be key.
These efforts won’t replace technology. A digitally aware consumer base combined with cutting-edge tools will create a fraud prevention ecosystem that’s both proactive and resilient.
