Account Takeover Fraud Is Surging—Here’s How the Financial Services Industry Must Respond

All financial services providers and platforms must move beyond incremental fixes and take responsibility for closing blind spots. Fraud prevention APIs can be plugged into existing systems without disruption.

Account takeover (ATO) fraud isn’t new, but it’s accelerating at an alarming pace. The FBI reports over $262 million lost to ATO scams in 2025 from 5,100 complaints—just a fraction of what the Aspen Institute calls a “national security threat” and the Consumer Bankers Association deems a national emergency.

Even with years of warnings and forecasts, billions spent on fraud prevention, and growing cross-industry-government collaboration, the problem keeps getting worse. A recent American Banker article cited the 250% surge in ATO fraud and the increasing risks such attacks pose across the financial services ecosystem—including banks, credit unions, fintechs, and payment platforms—as regulators and courts scrutinize where responsibility should fall when scams succeed.

The rise in ATO fraud comes at a time when money moves faster and fraudsters are getting smarter—leveraging AI to perpetrate convincing schemes that are getting harder to detect. Fast funds flow has become fast fraud flow, but it doesn’t have to be that way.

Solving ATO doesn’t require massive budgets or multi-year programs. The solution requires linking identity data more intelligently.

Why Existing Fraud Prevention Tools Can’t Keep up with ATO Fraud

Today, fragmented identity systems make it easier for fraudsters to bypass KYC, manipulate customers, and take over accounts. These attacks are thriving because many organizations still rely on outdated, static controls while attackers move faster with AI, synthetic identities, and increasingly sophisticated impersonation schemes that exploit customer trust.

Financial institutions are losing hundreds of millions because attackers exploit weak points in legacy detection systems—tools built for a world of isolated data sources, predictable fraud patterns, and slower payment rails.

Fraud today is dynamic. It exploits fragmentation. When identity signals are scattered across devices, emails, businesses, transactions, and behavioral patterns, financial services providers—even most fraud prevention partners—can’t see the full picture. And without that picture, subtle anomalies go unnoticed until the money is gone.

Having Data isn’t Enough, It’s the Connections Between the Data

Data matters, but connected data matters more. To stay ahead of attackers, financial services providers and their technology partners must treat identity as a dynamic, continuously evolving profile. That requires correlating signals across devices, behavior, and transactions in real time and acting on risk in milliseconds.

As I recently discussed with the Editor of Finopotamus, John San Filippo, graph technology provides that capability. By linking billions of identity fragments—devices, emails, IPs, phone numbers, addresses, transactions, and behavioral signals—into a single, adaptable identity graph, we can reduce ATO risks. This real-time graphing technology spots risky identities and reveals relationships and patterns that rules-based systems consistently miss.

This is the thinking behind our Identity Fraud Intelligence Network (iFIN), which includes consumer and professional behavioral signals related to financial institutions, brands, commerce, breach and human intelligence sources from across the globe. From this expansive data set, our technology distills and continuously learns from the signals that matter, so you can do business with confidence. A graph-based approach surfaces context to help our customers identify:

• How online and physical identity fragments relate
• Emerging fraud patterns
• Where risk originates and where it’s likely to go next

When banks can see these connections in real time, account takeover becomes manageable and preventable, not inevitable.

The Industry Can Move Faster Than You Think

ATO fraud does not have to be a cost of doing business. Financial institutions, fintechs, and the platforms they depend on can move faster by unifying identity signals and strengthening detection before accounts are opened or compromised.

Most financial services and fintech leaders assume meaningful fraud improvement requires expansive (and expensive) core upgrades, long timelines, or major operational shifts. It doesn’t. Unifying identity signals and strengthening detection before accounts are opened and before money moves is something they can do now, with today’s tools, and without ripping apart existing infrastructure.

Fraud prevention APIs can plug into existing systems without disruption. The technology gap isn’t the issue. The action gap is.

Turn Fraud Prevention into a Growth Strategy

Fraud isn’t just a security problem. It’s a growth problem. In a recent Alloy survey, 92% of financial services decision-makers said fraud prevention directly contributes to business growth.

They’re right.

Better fraud defenses reduce losses, but they also:

• Lower operational overhead
• Improve onboarding conversion
• Strengthen regulator confidence
• Reduce customer friction
• Build trust, which is the real currency of financial services

And trust is in short supply. Consumers who experience ATO or failed reimbursement lose confidence fast and they leave. You don’t grow by eroding trust. You grow by protecting it.

The financial services industry faces extraordinary pressure with tight margins, rising regulatory scrutiny, real-time payment risks, and heightened consumer expectations. But ATO doesn’t have to be another uncontrollable variable on that list.

Fraudsters aren’t waiting. And neither should we.

Closing the Action Gap to Fight ATO Fraud

If the industry is serious about protecting consumers, safeguarding trust, and stabilizing losses, we must close the action gap, not just the technology gap.

We can solve this and we can solve it now. But only if leaders stop treating ATO fraud as an inevitability and start treating it as a preventable threat.

The path forward is clear: See the signals. Connect them. Act in nanoseconds to prevent fraud.

Let’s work together to protect your customers and your business.

Connect with us to learn more.