Every Dollar Lost to Fraud Costs North America's Financial Institutions $5, According to LexisNexis Risk Solutions

Rhea-AI Summary

LexisNexis Risk Solutions (NYSE:RELX) has released its 2025 True Cost of Fraud Study for North America, revealing that financial institutions now lose $5 for every $1 of direct fraud loss, a 25% increase from $4 in 2021. The study highlights that 44% of North American financial institutions still primarily rely on manual processes for fraud prevention, while only 20% are mostly or fully automated.

The research identifies key fraud vulnerabilities, with 38% of fraud losses attributed to scams in US lending, and 70% of US organizations reporting at least a 10% increase in mobile fraud over the past year. Bot attacks have emerged as a significant threat, with 48% of institutions reporting increased monthly bot attacks, while customer attrition due to fraud controls has affected 71% of US lenders and 78% of Canadian lenders.

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• None.

Negative

• Fraud multiplier increased 25% since 2021, now costing over $5 for every $1 lost to fraud
• 44% of financial institutions still rely mostly on manual processes for fraud prevention
• 70% of US organizations reported mobile fraud increased at least 10% in the last 12 months
• 71% of US lenders and 78% of Canadian lenders reported higher customer churn due to fraud prevention
• 48% report a rise in monthly bot attacks over the past year

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Nearly Half of US and Canada FIs Still Rely on Manual Tools While Bots and Scams Surge

ATLANTA, Sept. 10, 2025 /PRNewswire/ -- Fraud is widespread, hard to measure and difficult to prevent, according to the LexisNexis® True Cost of Fraud™ Study 2025 North America. As costs hit record highs, the eighth annual LexisNexis® Risk Solutions report shows that 44% of North American financial institutions (FIs) primarily rely on manual processes, hesitating to fully embrace automation and AI to combat fraud.

The LexisNexis Fraud Multiplier™ shows fraud's growing impact on operations, compliance, reputation and customer trust. Since 2021, it has increased across all financial services segments in North America, now averaging more than $5 for every $1 lost to fraud, up 25% from $4.00 only four years ago.

Type of FI	2021 Cost per $1.00 Fraud Loss	2025 Cost per $1.00 Fraud Loss
US Financial Services	$4.00	$5.75
US Lending	$4.16	$5.38
Canadian Financial Services	$3.65	$4.99
Canadian Lending	$4.00	$5.42

FIs highlight fraud vulnerabilities at every stage of the customer journey. Among US financial services firms, 30% of fraud is found at new account creation, 31% occurring within transaction activity and 39% during account login or access.

Many organizations fail to track fraud comprehensively, leading to underestimated losses. Only 45% of FIs track fraud across both payment methods and transaction channels. Another 25% track it only across transaction channels, while 28% focus solely on payment methods.

Nearly half of FIs (44%) rely mostly or entirely on manual processes, while only 20% are mostly or fully automated. As fraud becomes more advanced, FIs that avoid modernizing with automation and AI risk falling behind in prevention and customer protection.

"Fraud is a dynamic, escalating threat that touches every corner of an FI's operations. However, FIs don't need simply accept it as a cost of doing business," said Kimberly Sutherland, global head of fraud and identity at LexisNexis Risk Solutions. "Our latest study reveals that as fraud losses climb, many organizations still depend on manual processes that fail to match today's sophisticated attacks. Leading FIs with the lowest fraud costs adopt automation, AI and cross-channel visibility to detect more fraud faster through a multi-layered approach. Importantly, they attain this while preserving the experience for genuine customers."

Key Findings from the True Cost of Fraud™ Study 2025 North America:

• Scams pose an increasing threat to FIs. Scams cause 38% of total fraud losses for US lenders and 36% of overall fraud losses across all FIs.
• Malicious bots present a mounting threat to financial institutions. Forty-four percent (44%) identify bots as a major hurdle in verifying customer identities online and via mobile channels, while 48% report a rise in monthly bot attacks over the past year.
• Mobile fraud represents a major risk, accounting for over a third of total fraud losses across FIs. US FIs are the most vulnerable, with mobile fraud increasing in financial services while remaining steady or slightly declining among lenders. Seventy percent (70%) of US organizations reported mobile fraud increased at least 10% in the last 12 months.
• Fraud controls have led to increased customer attrition for many North American institutions. Over the past 12 months, 71% of US lenders and 78% of Canadian lenders reported higher customer churn due to fraud prevention strategies. Balancing robust protection with a lower friction for trusted customers remains a critical challenge.
• Fraud-mature organizations take a proactive approach to tracking fraud and invest in future prevention. This strategy strengthened defenses and reduced customer churn by 29% over the past year for those using mostly or fully automated systems. Fraud-mature organizations consistently report better outcomes in reducing churn and stopping fraud.

Methodology: LexisNexis® Risk Solutions commissioned KS&R to conduct a survey of 507 risk and fraud executives in Financial Services and Lending organizations in the US (423) and Canada (84) in April and May 2025. Data collection and survey questions reference a 12-month period. The study provides organizations with data and analysis to understand the current state of fraud and the challenges associated with digital payments in emerging markets.

Download the LexisNexis® True Cost of Fraud™ Study 2025 North America.

About LexisNexis Risk Solutions

LexisNexis® Risk Solutions harnesses the power of data, sophisticated analytics platforms and technology solutions to provide insights that help businesses across multiple industries and governmental entities reduce risk and improve decisions to benefit people around the globe. Headquartered in metro Atlanta, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information-based analytics and decision tools for professional and business customers. For more information, please visit LexisNexis Risk Solutions and RELX.

Media Contact:
Ade O'Connor
+44 7890 918 264
ade.o'connor@lexisnexisrisk.com

 

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SOURCE LexisNexis Risk Solutions

FAQ

What is the current fraud multiplier cost for financial institutions according to LexisNexis 2025 study?

According to the study, financial institutions now lose $5 for every $1 of direct fraud loss, representing a 25% increase from $4 in 2021.

How many financial institutions still rely on manual processes for fraud prevention in 2025?

44% of North American financial institutions still primarily rely on manual processes for fraud prevention, while only 20% are mostly or fully automated.

What percentage of US organizations reported increased mobile fraud in 2025?

70% of US organizations reported that mobile fraud increased by at least 10% in the last 12 months.

How are scams affecting US lenders according to the LexisNexis 2025 fraud study?

Scams are causing 38% of total fraud losses for US lenders and 36% of overall fraud losses across all financial institutions.

What is the impact of fraud controls on customer retention according to the 2025 study?

The study found that 71% of US lenders and 78% of Canadian lenders reported higher customer churn due to fraud prevention strategies over the past 12 months.