The financial toll of fraud on U.S. financial services firms has reached a record high, with every dollar lost to fraud now costing firms $5.47 in total, according to the LexisNexis Risk Solutions True Cost of Fraud Study 2026 North America. Released on October 19, 2026, the report surveyed 319 risk and fraud professionals across the U.S. (251) and Canada (68) and found that digital channels—websites and mobile apps—now account for 69% of all fraud losses, up from 52% in 2021.
The study highlights a dramatic shift in fraud tactics, with AI-generated attacks and synthetic identity fraud becoming the dominant threats. Nearly all respondents (96%) reported increased fraud targeting mobile apps over the past year, and 69% said mobile fraud costs rose by at least 10%. Online portals and websites account for 39% of losses, while mobile apps contribute 30%. Card transactions and account transfers together represent 48% of losses by payment method, with digital wallets already accounting for 15%.
Fraud is most concentrated at the transaction stage, which attracts 39% of losses, followed by new account creation (33%) and account login or access (28%). Scams are a particularly complex issue, representing 32% of losses in North America, but U.S. firms reimburse only 31.2% of scam losses compared to 38.9% in Canada, reflecting differing regulatory environments. Malicious bot attacks also compound the problem, representing 14% of all monthly transactions in the U.S., with 58% of American respondents reporting year-over-year increases in bot volume.
AI is being used by fraudsters in approximately 19% of U.S. fraud losses, rising to 25% in Canada. In response, financial institutions are accelerating their own AI deployments: 56% use AI to defend against synthetic identity fraud and account takeover, and 48% deploy it against scams. Synthetic identity fraud—where criminals combine real and fabricated personal data—is the largest fraud category, accounting for 19% of losses, while third-party identity fraud, third-party account takeover, and first-party fraud each account for 17%.
The study also reveals a clear performance gap between automated and manual fraud prevention programs. Organizations with mainly automated programs reported 89% effectiveness, compared to 61% for manual-first firms. They also saw greater reductions in customer churn (29% vs. 10%) and stronger overall fraud prevention improvement (79% vs. 54%). Higher-maturity firms are more than twice as likely to track fraud by both channel and payment method, giving them an edge in spotting emerging attack patterns.
Despite the benefits of automation, adoption is uneven. About 31% of North American organizations cite limited internal expertise as a top barrier to deploying AI-based fraud detection, while 26% point to integration complexity and 25% to data quality issues. The study also notes that fraud prevention strategies can inadvertently increase customer churn—56% of respondents said their strategies have done so—highlighting the need for frictionless security measures.
Looking ahead, 62% of institutions plan to invest in AI-enhanced identity verification, 55% in digital identity wallets, and 53% in biometric authentication. The findings underscore the importance of robust fraud defenses for financial advisors, who may see clients affected by these trends. For more on related risks, see real estate fraud hitting $275M and SEC actions against AI fraud.
