European banks face rising fraud complexity, adopt AI

The Finextra survey of 200 European fraud leaders, conducted in association with NICE Actimize, finds banks reporting higher fraud complexity in 2026 and rising investment in artificial intelligence, while integration problems slow modernization.

Respondents said conventional threats such as card fraud and account takeover remain significant. Newer concerns include AI-initiated payment flows and fraud linked to virtual assets. Many fraud teams reported fraud accelerating across payment and digital channels, increasing demand for broader monitoring and faster responses.

Fraud teams are investing in AI and advanced analytics to detect both established and emerging schemes. Machine learning-driven detection and behavior analytics are among the top investment priorities, along with stronger fraud controls for payments and digital channels. Several respondents indicated plans to share more data with peers and pursue sector collaboration to track new tactics.

The report finds integration of new tools with legacy systems and established processes is delaying deployments and limiting how quickly institutions can adapt. It also finds uneven levels of expertise, funding and tooling across European markets, producing gaps in coverage and response capacity.

On confidence, a substantial share of respondents said they do not expect current capabilities to be adequate over the next few years. That view has prompted reallocation of budgets and staffing toward detection, analytics and control upgrades.

Finextra hosted a webinar on the findings with NICE Actimize. The session, moderated by Finextra researcher Sharon Kimathi, gathered industry experts to discuss which controls are performing well and where further investment may be needed. Panelists described the challenge as technical and organizational, noting that reducing integration friction and strengthening skills and funding would affect the pace of modernization.

The survey notes variation in fraud patterns across European countries, which affects priorities and timelines for upgrades. The report offers a snapshot for 2026 showing AI as a leading option for improving detection and prevention while many banks face practical hurdles before they can scale new tools.