In the age of instant payments and digital convenience, scams have evolved with unprecedented speed. One of the most deceptive, and costly types, is Authorised Push Payment (APP) fraud, where customers are tricked into sending money to criminals posing as trusted individuals or organisations.
For victims, the impact is deeply personal. Savings are lost. Trust is shaken. Confidence in digital banking erodes. But APP fraud spreads well beyond the customer. It’s increasingly something banks and institutions must absorb.
In some instances, for example in the UK, banks have now returned 88% of APP fraud losses to victims – about £173 million over the year — underscoring both the scale of the issue, as well as the financial burden on institutions.
But what does this mean for CFOs trying to balance risk, reputation and resilience?
Fraud is becoming a line item
APP fraud is simply becoming a recurring cost centre for financial institutions, and it’s one that CFOs must quantify, manage and justify. Importantly, three shifts are reshaping the landscape:
Becoming a mandatory liability
With reimbursement rates rising significantly, fraud losses are increasingly absorbed by financial institutions. That means fraud exposure of an institution is booked, reported and scrutinised.
Predictable cost pressure
As scams become more sophisticated and social engineering tactics improve, APP fraud volumes remain high. For CFOs, this creates volatility: uncertain loss forecasting, fluctuating reserves and mounting financial provisions they have to balance.
From customer issue to enterprise risk
Beyond reimbursement, there’s operational burdens tied to APP fraud – investigations, claims processing, dispute resolution – all of which draw further on internal resources. Add reputational risk and regulatory oversight to the mix, and APP fraud becomes a cross-functional financial challenge.
In short, the question is no longer whether institutions will reimburse victims, seeing as regulations and public expectation across the globe have largely settled that debate. The real question for finance leaders is:
How sustainable is a model that primarily absorbs losses instead of preventing them going to be in the long-run?
Moving from reimbursement to prevention
For CFOs, resilience is not about reacting efficiently, it’s about reducing exposure in the first place. Because reimbursement simply manages the cost of failure. Prevention reduces the likelihood of failure.
Therefore, what institutions truly need is visibility and control at the payment level – the ability to identify high-risk transactions before funds leave the account. That requires more than static rules or post-event analysis. It requires real-time intelligence embedded within payment workflows.
That’s where Eastnets’ PaymentGuard comes in.
Rather than waiting to compensate victims, PaymentGuard offers a proactive approach to combat APP fraud by:
- Monitoring payments in real time
- Analysing behavioural and contextual risk indicators
- Allowing informed intervention before transactions are completed
- Reducing reimbursement payouts
- Lowering long-term operational handling costs
- Strengthening regulatory positioning
This solution doesn’t just protect customers; it protects institutional balance sheets. By reducing the volume and value of scam payments that require reimbursement, banks can limit their financial exposure and shrink operational overhead. Learn more about how Eastnets supports financial institutions with advanced fraud prevention solutions: https://www.eastnets.com/solutions
Resilience is built before the payment leaves
APP fraud will continue to evolve as criminals innovate. However, financial institutions don’t have to be on the back foot. Yes, customers expect security and regulators demand accountability, but boards also expect financial discipline.
APP fraud now sits at the intersection of all three. It’s time to move beyond covering fraud losses and instead invest in preventing them. Because in today’s environment, fraud isn’t just a security problem. It’s a balance sheet one.
Want to learn more about how PaymentGuard helps prevent APP fraud before it happens? Visit Eastnets PaymentGuard today