Intelligent fraud prevention: securing payments in an increasingly complex digital world

As digital payments become faster, more convenient and more widely adopted, fraud prevention is entering a new era.

At Nexus Luxembourg 2026, Ananda Kautz, Member of the Management Board at ABBL, moderated a panel discussion exploring one of the most pressing challenges facing the financial sector today: how can organisations strengthen fraud prevention while preserving the seamless customer experience that users increasingly expect?

Bringing together experts from PayPal, POST Luxembourg, LuxHub and LuxTrust, the discussion examined how fraud is evolving, why traditional approaches are no longer sufficient and what forms of cooperation will be needed to keep Europe’s payment ecosystem secure.

One message stood out above all others: fraud prevention can no longer be viewed solely as a banking challenge.

According to data shared during the discussion, around 50% of fraud cases in the UK originate on Meta platforms, illustrating how scams increasingly begin outside the banking environment, often long before a payment transaction takes place. Fraud may start on a social media platform, continue through a phishing message or a spoofed phone call, involve a fake website or a compromised identity, and only end when a payment is initiated.

This reality is fundamentally changing how organisations approach fraud prevention.

From banking challenge to ecosystem challenge

For many years, fraud prevention focused primarily on securing payment infrastructures and customer authentication processes.

Significant progress has been made. Strong Customer Authentication (SCA), real-time fraud monitoring, behavioural analytics and increasingly sophisticated risk management tools have helped make European payment systems among the most secure in the world.

Yet fraud continues to evolve.

As payment systems become more resilient, criminals are increasingly targeting people rather than technology. Fraudsters exploit trust through phishing campaigns, fake investment opportunities, spoofed phone calls, romance scams and other forms of social engineering designed to manipulate victims into authorising transactions themselves.

The consequence is clear: protecting customers now requires action far beyond the banking sector.

From technical fraud to social scams

The discussion highlighted a major shift in the nature of financial crime.

Traditional fraud often involved stolen credentials or compromised payment instruments. Today’s scams are increasingly psychological rather than technical.

Criminals invest significant resources in understanding human behaviour and exploiting emotional responses such as fear, urgency or trust. Victims are persuaded to act willingly, often believing they are interacting with legitimate institutions or trusted individuals.

This evolution requires organisations to move beyond transaction monitoring and develop a deeper understanding of customer behaviour and contextual risk.

The objective is no longer simply to protect the payment itself, but to protect the individual behind the payment.

The power and peril of artificial intelligence

Artificial intelligence emerged as both a growing threat and a critical defence tool.

On one hand, AI enables criminals to create increasingly convincing scams through synthetic voices, deepfake videos and forged documents. These technologies make fraudulent communications harder to identify and more persuasive than ever before.

On the other hand, AI is becoming an essential component of modern fraud prevention.

Participants discussed how advanced analytics can help identify suspicious patterns, assess risk more accurately and move from static controls towards predictive and continuous monitoring. By analysing large volumes of data in real time, institutions can better anticipate threats while maintaining a smooth customer experience.

The goal is not to create additional friction, but to strengthen security behind the scenes.

Building trust through digital identity

Digital identity was identified as another key pillar of future fraud prevention strategies.

The development of the European Digital Identity Wallet and other trusted identity solutions creates new opportunities to strengthen authentication and reduce fraud risks across digital channels.

At the same time, participants stressed that technology alone is not enough. Effective governance, robust controls and ongoing awareness efforts remain essential to maintaining trust in an increasingly digital environment.

Towards a whole-of-society approach

Perhaps the most important conclusion of the discussion was that no single organisation can tackle modern fraud alone.

Financial institutions remain a critical line of defence, but effective prevention increasingly depends on collaboration across sectors and borders. Telecommunications providers, technology companies, digital platforms, identity specialists, regulators and public authorities all have a role to play.

• Information sharing will be essential. So too will stronger cooperation between sectors that have historically operated separately, despite facing the same criminal networks.
• Education remains another vital component. Helping consumers recognise the warning signs of scams and social engineering attacks continues to be one of the most effective forms of prevention.
• As fraud becomes more sophisticated and increasingly international in nature, prevention must evolve towards a model based on collective intelligence, shared responsibility and trusted cooperation.