How big a problem is online fraud? It’s pretty immense and it’s getting bigger by the day. A joint report published by the European Central Bank (ECB) and European Banking Authority (EBA) has laid bare the staggering costs of financial crime across the European Economic Area – and the numbers aren’t pretty. We sat down with Valerija Jerenkevič, Fraud Manager at Connectpay, who walked us through the latest trends in online fraud and fraud prevention.
But first – the numbers. According to the European Banking Authority, a jaw-dropping €4.3 billion was lost to fraudulent transactions in 2022, with another €2 billion vanishing in just the first half of 2023. These losses span the full spectrum of modern banking – from traditional credit transfers to cutting-edge e-money transactions – painting a troubling picture of vulnerability in Europe’s payment infrastructure. And the problem of fraud shows no signs of abating. As KYC specialists Mitek have reported, digital fraud exploded to $47.8 billion globally in 2024 – up 15%. Meanwhile, synthetic identity scams shot up 31% thanks to AI, while check fraud surged 28% amid a wave of deepfake and phishing attacks, according to the FTC.
New Technologies = new opportunities for fraud
What is fueling this rise? Well, the unfortunate truth is that, although such innovations as instant payments, and the increasing use of AI, have delivered immeasurable comfort, ease, and convenience to us all, they have also created unfettered opportunities for enterprising fraudsters.
Take synthetic identity fraud, for instance, where criminals have turned identity creation into a dark art, seamlessly blending real and fabricated personal data to create ghost customers that can circumvent security protocols. The very interconnectivity that makes Open Banking so revolutionary has become a double-edged sword, with fraudsters exploiting these data highways to orchestrate increasingly sophisticated scams across multiple financial platforms.
“In a particularly devious twist, scammers have found ways to weaponize our own phone numbers against us. Through SIM swap attacks, they’re smooth-talking mobile carriers into transferring numbers to new cards, effectively hijacking what was meant to be one of banking’s strongest safeguards – two-factor authentication,” Valerija Jerenkevič, Fraud Manager at ConnectPay, says.
Protecting ourselves and our businesses
All of this bad news can seem daunting. Is there anything we can do to protect ourselves, and our businesses? According to Valerija Jerenkevič, the answer is emphatically yes.
“First, never disclose to unknown people or in suspicious links your personal or confidential information, here I’m talking about your name, surname, address, online banking credentials, credit/debit card credentials, or anything personal. Second, fraudsters often ask victims to download programs onto their phones or computers, claiming they’re needed to show investment graphs, but this is false. Never download any apps or disclose personal or online banking information. Third, don’t believe in getting rich quick schemes – that only happens in fairy tales or legitimate lotteries. We live in a digitalized world, and while we’re happy about technological advances, we often forget about hidden fraud risks. Psychology is definitely important – we’re all in a hurry, and fraudsters catch us in vulnerable moments. We need to learn to be more vigilant and careful, and not rush so much. The rule that we all need to be mindful of is “think before you click.”
Fraud in Fintech – the bigger picture
In their quest to transform banking through user-friendly, instant transactions, Fintech companies like ConnectPay face a growing security challenge. The innovative, digital-first approach has revolutionized financial services, but sophisticated criminals are evolving just as quickly, using AI-generated deepfakes and darknet networks to trade stolen data and coordinate complex attacks.
This is exactly why education needs to be at the forefront of any anti-fraud strategy. As Valerija emphasizes, the key lies in creating a well-informed ecosystem where everyone – from customers to employees – can recognize and respond to fraud attempts. Leading fintech companies, including ConnectPay, are already taking this approach to heart, developing comprehensive education programs that go beyond just internal training. In Valerija’s case, she has taken her role as specialist and educator to heart, and has begun an internal blog where she shares case studies from her own experience as well as the knowledge she’s gained in her role, in a relatable and engaging way. This is a reflection of the proactive approach that Connectpay takes towards the education of its clients. As Valerija explains: “We want our customers to be as protected as they can be from all the potential risks. That’s why we not only apply all the preventive measures possible, but also do our best to educate our customers to remain vigilant.” .
Forewarned is forearmed – education and sharing are key to fighting fraud
Indeed, while sophisticated AI systems and identity verification tools play a crucial role, the human element remains irreplaceable. Companies are increasingly investing in community-based approaches, encouraging users to share their experiences and learn from each other. With new PSD3 regulations on the horizon promising better information sharing between financial institutions, there’s an unprecedented opportunity to create a more fraud-resistant financial ecosystem – one where education and awareness serve as the first line of defense against increasingly sophisticated threats.
As Valerija reflects: “What I’ve noticed fighting fraud is that while scammers use sophisticated tools like AI and deep fakes, our best defense is surprisingly simple. It’s about slowing down, being vigilant, and sharing what we know. Every person who learns to spot a scam is another wall against fraud. And that’s how we’ll win this fight – not just with technology, but by helping each other stay safe.”
