Financial crime prevention is becoming a frontline customer experience issue for banks and fintech firms, as consumers increasingly link trust and transparency with how effectively providers detect fraud and financial crime.
New research from ThetaRay found that 88 percent of U.K. banking customers would switch providers over failures tied to financial crime compliance, indicating that anti-money laundering (AML) and fraud controls now have direct consequences for customer retention and brand perception,” Brad Levy, CEO of ThetaRay, stated:
“Compliance has moved from back office to front-line engine for customer retention. Switching banks is no longer a major barrier for consumers, and they expect trust, convenience and strong AML practices from their financial institutions.”
Financial institutions face growing pressure to balance stronger fraud prevention with low-friction digital experiences. According to the report, 96 percent of respondents expect real-time transparency during transaction freezes and 80 percent would switch providers if they experienced “repeated inconvenience” from security checks, reflecting rising customer expectations around explanations during compliance processes.
The shift indicates how fraud prevention has evolved from a back-office compliance function into a visible part of the customer journey.
AI Fraud Protection Becomes Customer Facing
Fintech firms are responding by investing heavily in AI-driven fraud detection and customer-facing security features.
Revolut has expanded its messaging around fraud protection, highlighting automated transaction monitoring, behavioural detection systems and in-app scam warnings designed to intervene before customers complete suspicious payments. The company says its 24/7 financial crime operations helped protect customers from more than £632MN in potentially fraudulent activity.
Revolut is expanding its customer support team and is investing in training programs.
“In practice, that means a combination of technology and human expertise working together. Our AI systems identify high-risk transactions and suspicious spending patterns immediately, detecting more than 95 percent of attempted scams. For the highest-risk cases, a dedicated fraud prevention team engages directly with customers to review and act.”
The digital bank has also increased customer education efforts around phishing, fake retail websites and authorised push payment (APP) scams, areas where social engineering continues to outpace traditional fraud controls.
Reducing Friction During Onboarding
The operational challenge for banks and fintechs is that tighter controls can easily create onboarding friction, delays and false positives if not designed carefully.
That tension is driving new partnerships focused on combining compliance automation with smoother customer journeys. Payments automation platform Modulr recently formed a partnership with identity and fraud prevention company Alloy to streamline onboarding for scaling customers across multiple markets while maintaining strong risk, compliance, and financial crime controls.
Alloy COO and CPO Parilee Wang said the partnership is focused on delivering “a streamlined, low friction onboarding experience without compromising on compliance rigor.”
Under the agreement, Modulr will integrate Alloy’s identity verification and risk assessment technology into its compliance infrastructure to support onboarding, fraud prevention and customer protection throughout the customer lifecycle.
Ben Taylor, Chief Operating Officer at Modulr indicated that the industry is facing the push and pull of pressure from rising fraud cases and increasing customer expectations:
“At Modulr, we’re building a Risk & Compliance Hub that can stand up to the pace of change in financial crime and regulation, whilst also allowing us to give an improved onboarding experience to our scaling customers.”
The scale of fraud in the U.K. continues to accelerate, with fraud prevention service Cifas reporting that its members recorded more than 1,200 cases every day and prevented £2.4BN in fraud losses in 2025. Around 72 percent of cases were linked to identity fraud and facility takeover, indicated that criminals are increasingly using stolen or compromised personal details to carry out wider financial harm.
Trust Is Becoming a Competitive Advantage
The developments reflect that customer experience teams and risk functions are becoming increasingly interconnected. Fraud prevention measures that once operated invisibly are now customer-facing moments that can either reinforce confidence or drive churn.
With Authorised Push Payment (APP) fraud, phishing attacks and social media-enabled scams continuing to rise across the U.K. financial services sector, institutions are being pushed to design experiences that combine reassurance, speed and proactive protection. In many cases, fraud prevention is the customer experience.
