As Britain’s biggest banks scale up their technology, lenders are turning to AI to fight fraud, a new report has found.
NTT Data’s ‘Banking Trends 2025’ report found over half of UK banks thought generative AI was key to fraud prevention.
Lenders have been urged to up their consumer protection abilities after Chair of the Treasury Committee Dame Meg Hillier wrote to Barclays boss Vim Maru calling for transparency on the consequences of IT outages.
NTT’s report suggests AI will drive these protections with nearly 40 per cent of firms beginning implementation of GenAI for fraud prevention
This follows Natwest announcing a major collaboration with OpenAI this week, with “bank-wide simplification” at the centre.
The lender said it would leverage OpenAI’s chest of the latest technology to identify, report and resolve fraud and scams.
Lloyds began its AI expansion last year, with the flagship announcement of its ‘AI Centre for Excellence’ headed up by former Amazon executive Rohit Dhawan.
The firm said it was using the integration of AI and analytics to detect early warning signs of fraud.
Regulation means AI adoption is ‘gradual’
Banks face tough regulations to compensate victims of fraud, with the introduction of the Authorised Push Payment reimbursement scheme in 2024 mandating sending and receiving payment service providers to share the cost of reimbursements.
NTT DATA’s chief technology officer for banking and financial markets, Sumant Kumar, said the baking sector’s “complex and highly-regulated” nature meant the adoption of GenAI was “rightly gradual and cautious”.
Chancellor Rachel Reeves has spearheaded efforts to deregulate the UK, in a bid to “cut the red tape” blocking growth.
The government announced earlier this month the Payment System Regulator, which introduced the reimbursement rules in October, would be folded into the Financial Conduct Authority in its first flagship regulatory reform.
Kumar said: “In these turbulent times, banks must embed resilience and security at the heart of their systems and services.
“Cyber crime continues to rise, as does the threat of cyber attacks by hostile powers – increasing the risks facing financial service providers.”
“An intelligent approach using carefully-constructed GenAI models can generate major efficiencies while reducing risk,” Kumar said.