Insights

The Most Common Fraud Threats Facing Financial Institutions (and How to Fight Back)

Jan 20, 2026

The New Cost of Doing Business

According to a recent study commissioned by Somos, over 99% of financial institutions deal with fraud, with nine out of ten seeing a continued rise in fraud attempts in 2025. Fraud is no longer just an issue to be dealt with – but a constant presence in the business of banking.

While emerging technologies like AI are creating new risks, the most common threats remain familiar: phishing, smishing, payment scams and phone-based impersonation.

Phishing uses deceptive emails to obtain personal or financial information, while smishing utilizes text messages to accomplish the same goal – often with links that lead to fake login pages or malware. Vishing is the voice version, and typically involves a phone call that convinces victims to share information or authorize transfers.

Spoofing disguises a scammer’s number to make it appear as though a call or text comes from a trusted source, while impersonation combines some or all of these tactics – using lookalike numbers or messages to trick customers into responding.

Each method is (unfortunately) alive and well in the world of financial institutions, and the results of our survey show that clearly. Phishing (98%) is the most common attack, followed by smishing (76%) and payment scams (75%), with spoofing (55%) and impersonation (45%) tailing close behind.

More than half of financial institutions report that these attacks have damaged customer confidence. When it comes to banking, where customers are putting their very futures in an institution’s hands, trust is the product. So, when that trust crumbles? The relationship between institution and customer crumbles with it.

How Somos^® Strengthens the Frontline

Though different in execution, each of these fraud types target the communication channels that connect financial institutions with their customers. That’s why Somos has developed a suite of tools to protect those channels and verify the identities behind them.

Take phishing and smishing, which depend on fake senders and unverified messages – often from real brand numbers being misused, right under that brand’s nose. RealBrand® zeroes in on this, by giving enterprises full control and visibility of their numbers and their behavior. It authenticates outbound communication and enables trustworthy displays of verified caller information. This way, misuse of numbers is put to a halt, and customers see clear, consistent proof of legitimacy, reducing the effectiveness of fraudulent links or messages.

Inbound impersonation and misdirected communications create critical exposure for brands, especially as bad actors exploit reassigned or recycled phone numbers to gain access to accounts or establish synthetic mule identities. RealAgent® continuously validates consumer numbers in real-time, enabling brands to trust inbound interactions, prevent unauthorized access and ensure sensitive alerts and authentication flows are only tied to legitimate customers.

Together, these tools secure communication from end-to-end. They help financial institutions protect both their internal systems and the ongoing customer relationships that depend on clear, trusted contact.

A 360° Defense Strategy

For brands looking to protect their reputation and the livelihoods of their customers, all of these tools can be part of a comprehensive defense program that combines internal protection, customer engagement and secure communication – three principles that can be broken down as follows:

1. Protect the Inside
   Fraud affects employees, systems and processes. Staff training, dual approvals and continuous monitoring help detect irregularities and prevent internal misuse.
2. Protect the Customer
   Authentication must be reliable and consistent. Multifactor verification, clear education and transparent communication give customers the confidence to recognize legitimate messages and calls.
3. Protect Number Identity
   Phone numbers function as identity assets and should be managed accordingly. Institutions benefit from maintaining verified inventories, using real-time authentication to confirm right-to-use and collaborating with telecom providers to detect and block irregular activity.

Fraud is a shared challenge, but for financial institutions, Somos offers the tools to best counter the main techniques of bad actors. By linking prevention directly to communication integrity, today’s financial institutions stand the best chance of protecting their systems, reputations and relationships alike.

Want to see how your financial institution can benefit from Somos’ Fraud Mitigation Solutions? Schedule a consultation with a Somos team member today at connect@somos.com.