The real cost of fraud isn’t the fraud

Fraud is often measured in pounds lost, but practitioners know the real damage is rarely reflected in the face value of a fraudulent transaction.

The true cost sits underneath the surface: in investigation time, recovery processes, customer friction, regulatory exposure, and the operational drag that slows a bank’s ability to grow.

In 2024, 55% of EMEA companies reported an increase in fraud, with levels now deemed a national security threat.

“Fraud looks legitimate; cyber breaches don’t. That’s why fraud costs more to clean up”.

This escalation has collided with rising digital transaction volumes, changing customer behaviours, and the widening attack surfaces created by mobile banking, instant payments and open finance. Even relatively small fraud cases now routinely cost 20 times the value of the initial fraud to resolve.

That multiplier comes from the operational chain that is triggered the moment a fraud case occurs. Consider the number of people involved in even a straightforward investigation: fraud analysts, risk teams, customer services, disputes, chargeback specialists, financial crime, compliance, cyber and legal. Each contributes time and cost, often working with incomplete information pulled from disconnected systems.

Fragmentation of data

This is one of the biggest contributors to this inefficiency. Fraud teams frequently operate across multiple tools - transaction monitoring, case management, identity systems, payment gateways, anti-money laundering workflows - none of which share data seamlessly.

These data silos slow investigations dramatically, increase false positives, and limit the ability to detect links between entities that operate across different channels or products.

The growing sophistication of fraud

Every investigation is more complex. Organised fraud rings use automation, synthetic identities, mule accounts, deepfake identities and social engineering tactics that leave thin traces across multiple systems. If those traces can’t be connected quickly, fraudsters win. And they win repeatedly.

Financial services organisations working with Elastic highlight a consistent theme: when teams can ingest and analyse data at speed, across all formats and channels, they begin to shrink the multiplier effect of fraud investigations. Faster ingestion reduces blind spots. Search-driven correlation accelerates triage. Unified visibility lowers operational cost.

Most importantly, reducing the total cost of fraud directly improves operating margins which is an increasingly critical metric in an environment where financial institutions are also managing rising regulatory expectations and competitive pressure from digital challengers.

Fraud is no longer a function in isolation

It’s a determinant of customer trust, institutional resilience, and organisational efficiency. Measuring it solely in financial-loss terms understates its real business impact. The institutions that recognise this, and address the systemic issues underneath, particularly data fragmentation, are the ones best positioned to get ahead of next year’s threat landscape.

Accelerate fraud detection and prevention with Elastic

Data is your most critical asset against the next generation of fraudsters. However, for many fraud teams, the availability and ingestion speed of critical data is limited.

This can mean multiple blind spots, the inability to scale operations, and a slower time to detect incidents. Additionally, customer habits are constantly changing, making it more challenging to recognise anomalies and react quickly.

Elastic complements your existing fraud strategy by rapidly ingesting, analysing, and making data consumable, all at scale. Protect customers, partners, and your entire organisation by capturing more data across formats, including time, space, geography, or other attributes — reducing blind spots and enabling you to scale your operations as you take on more customers and solutions.