The news: Consumers believe the use of AI makes it harder to detect scams, according to a recently published report from risk-management fintech Alloy. It also found that fraud prevention and security measures are top factors for 97% of respondents when they choose a bank.

More on this: The scam problem is widespread—and made worse by AI. Sixty-two percent of respondents had been victims of scams or knew someone who had. A substantial number had experienced AI-driven bank impersonations (28%), voice cloning calls (21%), and synthetic identity fraud (18%). Financial fallout from these scams can be steep: 20% of victims surveyed by Alloy lost more than $5,000.

What it means for banks: The fast rise of AI-driven scams highlights the need for stronger bank technology and better customer education. Banks’ typical risk-detection and decisioning tools were developed before AI products were widely available. It was too expensive for the average criminal to scale sophisticated scams.

Our take: Customer trust is paramount to a financial institution’s survival, and anything that erodes that trust can prompt them to switch or avoid certain banks altogether. With AI changing the scam landscape dramatically in just a few years, banks must accordingly invest in modern technology—including their own AI tools—and customer education.