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AI FRAUD PREVENTION FOR LATIN AMERICAN BANKS & FINTECHS 2025

AI Fraud Prevention for Latin American Banks & Fintechs 2025

March 5, 2025

In Latin America, where the adoption of digital banking and fintech services has been growing exponentially, fraudsters are leveraging artificial intelligence (AI) to commit crimes on an unprecedented scale. The rise of generative AI has also led to a substantial increase in cybercrime, particularly identity theft and fraud. As per the World Economic Forum, global cybercrime is projected to cost $10.5 trillion annually by 2025, up from $3 trillion in 2015. The stakes are especially high for this region, which has seen a surge in digital payment adoption and financial inclusion efforts.

The good news for Latin American digital banking security? AI is also equipping the region’s banks and fintechs with powerful tools to detect and combat fraud. This use of AI fraud detection in banking is helping reduce risk and minimizing losses while maintaining streamlined, user-friendly customer experiences.

Max Spivakovsky, Galileo's Senior Director of Global Payments Risk Management, described the dynamic as a “digital arms race, [with] the criminals and the cybersecurity and fraud professionals trying to stay one step ahead of each other all the way,” during a recent webinar.

Why a Proactive Anti-Fraud Strategy Is Key

Fraud continues to evolve rapidly in Latin America, where regions like Brazil, Mexico, and Colombia face unique challenges such as high card-not-present (CNP) fraud and identity theft. Advances in AI are accelerating the pace of this arms race, enabling both fraudsters and security professionals to innovate faster than ever.

“The difference between what we’ve seen [in the past] and what we’re going to see in the near future is that, given natural language models, the pace of trying to outdo one another is going to increase...” Spivakovsky noted.

In this high-stakes competition, a proactive anti-fraud strategy becomes critical. Latin American banks and fintechs must go beyond traditional reactive measures by implementing risk analysis tools that detect and prevent fraud before it happens.

Leveraging Anti-Fraud Tech in Latin America

Spivakovsky highlights the value of AI-driven proactive measures, such as tools that automatically notify financial institutions or customers when they may be targeted by fraudsters. These solutions can also cancel or restrict transactions in real time or even before an exchange of monetary means, which is especially important in markets like Latin America, where mobile payments and e-commerce growth have created new fraud vulnerabilities.

AI-Powered Detection and Operational Efficiency

AI’s ability to analyze patterns, behaviors, and customer activity is a game-changer for Latin America’s financial institutions, where manual fraud detection processes often struggle to keep pace with the volume of transactions. AI-powered fintech fraud prevention solutions not only enhance fraud detection accuracy but also reduce reliance on human resources.

The Executive’s Guide to Comprehensive Payments Fraud Detection

“Model creation is automated and recursively learned from previous experiences, such that exceptions requiring manual review become less and less common over time,” Spivakovsky noted.

This efficiency is particularly valuable in Latin America, where smaller banks and fintechs often face resource constraints and need scalable, cost-effective fraud prevention solutions.

Enhancing Customer Service with AI

Latin America is also seeing increased adoption of AI-powered chatbots and intelligent digital assistants that interact with customers in real time. These tools help address fraud concerns proactively, improving customer trust and reducing the operational burden on call centers—a critical advantage in a region where customer satisfaction drives loyalty in a highly competitive market.

Breaking Down Data Silos

In Latin America, where financial institutions often operate across multiple channels and jurisdictions, data silos remain a challenge. With AI, banks and fintechs can gain a holistic view of customer data, enabling better fraud detection and interoperability across platforms.

This integrated approach is essential for tackling fraud across the diverse ecosystems of Latin America’s financial landscape. By unifying data from multiple systems, banks and fintechs can strengthen their defenses against increasingly sophisticated fraud schemes.

Protect Your Customers—and Your Business—from Fraud

As the digital economy expands in Latin America, the fight against fraud requires constant innovation and vigilance. Galileo’s advanced AI-powered solutions empower banks and fintechs to stay ahead in this fast-moving landscape, delivering both security and seamless customer experiences.

Learn more about how Galileo can help your business lead the charge against fraud in Latin America.

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