BPM Analytics
How can financial fraud awareness programs help prevent fraud?
Fraud in the financial industry poses a serious threat to the customers who lose money and the institution that loses its reputation. US consumers reported losing about $16 billion to fraud in 2025, the highest figure on record and around 25% more than in 2024, according to the Federal Trade Commission (FTC).
Customers notice financial fraud protection: in a February 2026 national survey for the American Bankers Association (ABA), 86% of bank customers said their bank takes proactive steps to protect them from fraud and scams. Banks must use internal and external training and awareness programs to secure customers and ensure loyalty.
This article explains ways to make financial fraud prevention a part of the financial institution’s culture through training and awareness programs.
What is financial fraud prevention?
Financial fraud prevention is the set of controls, training and monitoring that a bank, insurer or other financial institution uses to stop fraudulent transactions, account takeovers and scams before money leaves a customer’s account. It combines technology, such as transaction monitoring and strong authentication, with people-focused measures, such as fraud awareness programs for employees and customers.
Awareness matters because fraud prevention in financial services cannot rely on technology alone. Many scams succeed because a customer or employee is persuaded to approve a payment themselves, so the transaction looks legitimate to automated checks.
Making fraud awareness a part of the culture
Given the speed of online transactions, fraudsters can move the money quickly once they are successful. Prevention is the only way to have an upper hand. The financial institution needs to have its customers as partners to detect and prevent fraud.
Be aware of the types of scams
With digital scams, it does not mean the old methods are out. Always be on the lookout for forged and fraudulent documents, empty envelope deposits, and wire transfer frauds.
You can prevent wire transfer fraud by training employees to verify the authenticity of transfers. One simple method is to call the account owner on the number given in the request. For larger amounts, you must use more than one verification method. Our guide to detecting and preventing banking fraud covers the most common fraud types banks face today.
Educate the customers about phishing
According to a report, over 75% of online banking payment fraud happens through trusted accounts and devices. This means either someone used the customer’s device or duped them into making the payment through phishing.
Bank impersonation is a common route into payment fraud. The FTC reports that people lost nearly $1 billion to business impersonators in 2025, with bank impersonators behind the highest losses in that group, and many of these scams start with a fake security alert.
Fraudsters are getting better at making counterfeit emails and text messages seem genuine. The best way to prevent such activities is to ask your customers to be wary of clicking on direct links sent through text messages and emails. Such messages create a sense of urgency and panic to trick customers.
Warning signs worth sharing with customers include:
- A message or call that demands immediate action to protect the account
- A request for a one-time passcode, PIN or full password
- An instruction to move money to a new "safe" account
- A link in a text or email that opens a login page
- A caller who asks the customer to stay on the line or keep the call secret
After the initial training, they may still make a mistake. You need to frequently follow up and remind them of potential danger. Remind them not to give personal information to anyone posing as a bank employee, no matter how urgent it seems.
Organise fraud awareness programs for employees
Your team could fall prey to online fraud as easily as the customer. Ask your IT team to include a message in the email if it originated from outside the organisation. For example - ‘CAUTION - This email originated outside the organisation. Beware before you open.’
Employees could be in a hurry to respond to emails or execute transactions and may fall prey to scams. Ensure regular training sessions and have a manual checklist ready for each employee as they work with emails and banking systems.
Review audit trails regularly
Have a team manually review daily audit trails, even if it is a time-consuming activity. Observe and flag things like excessive failed login attempts.
You can also have an AI-enabled fraud detection system that parses daily customer and employee activity and raises an alert if there is a significant deviation from the set pattern. The system would automatically alert the customers and the banking staff whenever there is an unusual activity. For example, login attempts from a new IP address or a different machine. This is the principle behind behavioural analytics for fraud detection, which builds a baseline for each user and flags departures from it.
Strategic fraud prevention program
All employees must be trained on the financial institution’s unique fraud exposure and risk factors in line with the Enterprise-Wide Risk Assessment (EWRA). Avoid generic training programs to elevate risk compliance and employee preparedness. The employees should have a reliable chain of command to deal with a vulnerable customer at risk of getting scammed. The Institute of Internal Auditors (IIA) Three Lines Model offers a useful way to assign these responsibilities:
1. First line
This includes the front-facing staff in the fraud prevention strategy. There should be a senior executive to coordinate the strategy through -
- Fraud strategy creation and implementation
- Analysis, recovery, and reporting
- Coordination between fraud prevention and cyber security
2. Second line
This team sets a holistic and well-structured picture of the firm’s risk exposure and sets the objectives to prevent fraud. They must regularly update the EWRA from the context of the financial institution’s activities and regulatory compliances. At this level, the institution must have adequate policies and procedures to train employees and prevent fraud.
3. Third line
This level includes an independent assessment of the institution’s risk management and fraud prevention preparedness. The third line holds both the first and second lines accountable through internal auditing.
How can Infosys BPM help with financial fraud prevention?
Infosys BPM’s fraud management services for banks and financial institutions help turn awareness into measurable prevention. The team combines fraud loss assessment, fraud alerting models and linked-entity identification to surface patterns such as account takeover, phishing and payment fraud that manual reviews can miss. Sharper alerts mean fewer false positives, so fraud teams spend less time on genuine customers, and the patterns found feed back into customer education and employee training.
Frequently asked questions
What is the difference between fraud awareness and prevention?
Fraud awareness is about people: teaching customers and employees to recognise scams, such as phishing emails or fake bank calls, before they act on them. Fraud prevention is the wider programme that awareness sits inside, covering transaction monitoring, authentication controls, audit trail reviews and clear escalation routes. Awareness reduces the number of scams that reach the payment stage, while prevention controls catch the ones that get through.
How often should financial institutions run fraud awareness training?
Most institutions combine training at onboarding, a refresher at least once a year and short updates whenever a new scam pattern appears in their own cases or industry alerts. Teams that approve payments or handle customer accounts benefit from more frequent, role-specific sessions, since generic training rarely reflects the scams those teams actually face.
How can a bank measure whether its fraud awareness program is working?
Useful measures include the click rate on simulated phishing emails, the number of suspicious messages staff and customers report, how quickly those reports reach the fraud team and the trend in losses from scams where the customer or employee approved the payment. Comparing these before and after each campaign shows which messages change behaviour and which need rework.
When should a financial institution use an outsourced fraud prevention partner?
Outsourcing makes sense when alert volumes outgrow the in-house team, when monitoring needs to run around the clock, or when specialist skills such as fraud data analysis and case investigation are needed faster than they can be hired. The institution keeps ownership of its risk appetite and policies, while the partner runs day-to-day monitoring, investigation and reporting against agreed service levels.
