The payments landscape in Europe is evolving at breakneck speed. Consumers now expect instant transactions, seamless experiences, and global connectivity at their fingertips. But as the speed of payments increases, the time available to stop fraud decreases, with fraudsters using increasingly sophisticated tactics to exploit new gaps.
Over the last month, recent online data breaches at major retailers like M&S and Co-op have shown how vulnerable even the most established businesses can be, and just how quickly online threats are evolving. Meanwhile, regulatory bodies across the UK and EU are ramping up expectations around consumer protection and accountability, the pressure is on for financial institutions to step up.
Real-time fraud prevention is no longer a back-office function. It’s core to customer trust and brand resilience. At the centre of this shift is artificial intelligence – empowering the industry to stay one step ahead of scammers, not just keep up.
From Reactive Rules to Predictive Intelligence
Traditional fraud prevention approaches relied on static rules and investigations after the fact. The rise of faster payments, especially account-to-account and peer-to-peer transfers, has changed the game. Scams such as authorised push payment (APP) fraud now occur in seconds, leaving little time for manual intervention.
Social engineering attacks, including impersonation, romance, and purchase scams, are targeting consumers across every channel. In 2024, scams became the most prevalent type of website fraud, overtaking digital payment fraud. Scam-related fraud surged by 56%. In response, regulators in the UK and EU are mandating quicker reimbursement for fraud victims and greater accountability from banks. The need for proactive, real-time AI fraud prevention has never been clearer.
AI sees what Legacy Systems Miss
Artificial intelligence is fundamentally redefining how the industry detects and prevents fraud. By harnessing real-time transaction data, AI uncovers the faintest indicators of malicious behaviour that legacy systems simply miss. Industry-leading platforms like Consumer Fraud Risk integrate these insights to generate instant risk scores and stop threats before funds leave an account.
In practice, such solutions flag suspicious payments before they complete, empowering organisations to intervene seconds ahead of a scam. Advanced algorithms continuously learn from each incident, evolving alongside emerging fraud tactics to maintain an adaptive, self-optimising defence.
European pilots of AI-based monitoring report a significant drop in false negatives and a sharp decline in successful fraud attempts. This move from reactive to predictive intervention highlights the transformative impact of modern fraud prevention on restoring confidence in digital payments.
Smarter Decisions, Seamless Payments
Beyond detection, AI is transforming how banks and payment providers make decisions. AI-powered decision-making platforms now allow banks and payment providers to assess the risk of each transaction in milliseconds. These systems analyse contextual data, transaction history and behavioural signals to distinguish genuine activity from fraud.
This granular, automated risk scoring enables fewer legitimate payments to be declined, boosting approval rates and customer satisfaction. Businesses maintain momentum in sales, and consumers enjoy frictionless experiences whether they are shopping online, travelling abroad, or sending money to friends and family.
As regulatory frameworks like the Digital Operational Resilience Act take effect, AI-powered decision-making also supports compliance by providing transparent audit trails and timely reporting of suspicious activity.
Responsible AI and Regional Resilience
Modern AI systems continuously adapt, learning from every transaction to stay ahead of evolving threats. But technology alone is not enough. Winning the fight against fraud requires a united front – banks, fintechs, regulators and tech providers working together with shared purpose.
Across Europe, new collaboration hubs are already forming where public and private sector leaders come together to exchange insights, set standards, and strengthen defences. This kind of cooperation is no longer a nice to have. It is essential.
Legislation such as the Cyber Resilience Act and the Digital Operational Resilience Act is pushing the industry in the right direction by setting clear expectations for cybersecurity and governance.
Aligning around common principles will help create a more secure, more resilient digital economy. With the right partnerships and frameworks in place, AI becomes not just a powerful tool, but part of a broader, trusted strategy to stay ahead of tomorrow’s risks.
Looking Ahead to a Safer Digital Economy
AI won’t eliminate fraud entirely; however, it’s transforming the fight against financial fraud. By enabling real-time detection, intelligent decisioning, and adaptive protection, AI fraud prevention is making digital payments safer for everyone.
The next step is clear: double down on smart technology, strengthen partnerships and keep raising the bar on accountability. If Europe can pull this off, we’ll not only stay ahead of the fraudsters, but we’ll also unlock a truly resilient digital economy for everyone.
