94% of FIs and Their Customers Experienced Check Fraud According to Bank Director Survey
- Check fraud is a major issue for financial institutions and their customers
- It is also the most common type of fraud experienced by financial institutions
- 94% of financial institutions & their customers experienced check fraud according to a Bank Director survey
You read the headline right. According to a recent survey entitled Bank Director’s 2025 Risk Survey, 94% of respondents say that their bank or its customers have been directly affected by check fraud over the past 18 months.
Conducted in January 2025, the survey received responses from 269 independent directors, chief executive officers, chief risk officers and other senior executives of U.S. banks below $100 billion in assets to understand how they’re thinking about key areas of concern, such as cybersecurity, fraud, and credit risk.
The report provides us with not only the mindset of many banks executives, but what they are doing to address their concerns.
Highlights from the Report
The report provides a detailed breakdown for different categories of fraud that have impacted the FI or their customers -- with check fraud leading by a wide margin.
Source: Bank Director’s 2025 Risk Survey
While fraud involving AI and deepfakes remains low, Baker Tilly -- one of the sponsors of the survey -- warns that this may not be the case for very long.
Fraud involving artificial intelligence or deepfake media was much less common (15%). Craig Sanders, a principal with Baker Tilly, believes that could increase in the years to come with the widespread, cheap availability of generative AI capabilities. AI could already be a factor in more common types of fraud, such as elder abuse, where scammers can mimic a loved one’s voice to get them to send money.
How FIs are Addressing Their Fraud Concerns
The report details that FIs are attacking the fraud challenges with increased communication and education -- from staff to customers:
Source: Bank Director’s 2025 Risk Survey
What the report does not address is the specific technologies banks are implementing to fight against fraud -- particular check fraud. While the survey reports that 46% of respondents have invested in technology to boost the BSA/AML function, there is unfortunately no data for fraud technologies. And, as many are aware, fraud technologies may work directly with BSA/AML technology, but is independent in their purpose.
It's encouraging to see FIs putting resources towards education and training. However, they will not be effective in alleviating the fraud challenge without investment in technologies like transactional analysis, image forensic AI, rules engine, consortium data, and dark web monitoring, -- particularly when it comes to check fraud. It's recommended that FIs combine their education and training efforts while investing in these technologies, creating a multi-layered technology approach that effectively reduces check fraud attempts and losses for both the FI and their customer.