Organizations experiencing artificial intelligence (AI)-enabled fraud are struggling to keep pace with increasingly sophisticated attacks, according to a new survey by The Payment Association, the trade association for the United Kingdom payments industry.
In a survey of 100 senior U.K. financial services decision-makers across financial crime, fraud, risk, compliance, and related functions, The Payment Association found that 76% of respondents who had encountered AI-enabled fraud said it was “exceeding organisations’ ability to counter it.” This represented the largest perceived response gap of any financial crime risks examined in the research.
Despite the pace of AI-enabled fraud, only half of respondents said AI fraud prevention was among their organizations’ investment priorities for the next 12 months, with 41% of respondents stating that AI governance was the area of financial crime that most lacked practical implementation, ahead of crypto compliance at 37%.
Together, these findings suggest organizations are struggling to keep pace with the governance and implementation challenges posed by AI-enabled financial crime.
“Our findings show just how quickly AI-enabled fraud is evolving, while exposure to financial crime has become almost universal across the sector,” Emma Banymandhub, CEO of The Payments Association, said. “As fraudsters become more sophisticated, organisations must work together to strengthen prevention, improve intelligence sharing and respond more quickly to emerging threats.”
The results of the survey were outlined in ‘The UK Financial Crime Pulse 2026’ report, published by The Payments Association in July, which covered a range of financial crime and fraud.
Beyond AI threats, the most striking findings were that Authorized push payment (APP) fraud, or when someone is tricked into sending money to a fraudster posing as a genuine payee, was not the most commonly experienced form of financial crime, yet a majority (51%) of respondents rated it as the most severe challenge facing their financial crime function. By contrast, insider fraud was the most widespread risk, reported by 78% of respondents, despite only 35% describing it as a major challenge.
Although financial crime affects the entire sector, the report revealed that pressures differ by organization type.
Notably, banks were more likely to identify digital identity and know-your-customer (KYC) weaknesses as the most significant risk experienced, with 63% selecting this issue, while fintechs were more likely to identify fraud prevention as their leading source of operational uncertainty.
Other key findings included that a high percentage of financial crime leaders rated data-sharing limitations as a major or moderate challenge, despite data-sharing infrastructure being rated the least-favored investment priority at just 19%.
“Each type of fraud requires a tailored response, and that depends on effective data and intelligence sharing across the industry,” Banymandhub said. “While 73% rate data-sharing limitations as a major or moderate challenge, only eight of the 37 respondents who describe it as a major challenge are investing in the infrastructure needed to address it. That gap should concern the entire industry.”
Payment Association backing blockchain
In 2025, The Payment Association was among a cohort of trade groups that urged the U.K. government to include blockchain technology in a planned technology cooperation deal with the United States, known as the “Tech Bridge.”
In a September 11 letter, sent in anticipation of U.S. President Donald Trump making a state visit to the U.K. on September 16, the UK Cryptoasset Business Council, U.K. Finance, TheCityUK, and The Payment Association, among other groups, argued that distributed ledger technology (DLT) should be a “core strand” of a proposed technology deal with Washington.
The planned memorandum of understanding (MoU) would see the two countries create “complementary partnerships” across AI, quantum computing, defense innovation, and civil nuclear energy—the latter to power advanced computing economies.
“Excluding digital assets from the U.K.-U.S. Tech Bridge would be a missed opportunity,” wrote the groups. “It risks leaving Britain on the sidelines while others — particularly in the Middle East and Asia — move ahead in setting the standards that will shape the future of finance.”
The trade groups also warned that without coordinated action, U.K. firms acting in these sectors “could face fragmented regulatory environments, reduced access to deep transatlantic markets, and increasing competitive pressures.”
Regulatory compliance was a concern reiterated in The Payment Association’s recently published report, where 37% of respondents reported a lack of practical implementation in crypto compliance.
This suggests an acknowledgment that if the traditional financial sector is going to increasingly integrate and interact with new technologies, such as AI and blockchain, improving regulatory compliance will be a key hurdle to success, not least in terms of improving organizations’ response to financial crime.
In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.
Watch: Can we trust AI? How blockchain and IPv6 could fix accountability
Be the first to comment