As AI makes fraud faster, more convincing, and easier to scale, Alloy and MANTL help financial institutions strengthen fraud prevention with layered, identity-centric controls

October is Cybersecurity Awareness Month, and we’re committed to helping financial institutions strengthen cybersecurity and build more secure, resilient digital banking experiences. Throughout the month, we’ll be sharing insights, resources, and perspectives to support the ongoing work of staying ahead of evolving threats.

For regional and community banks and credit unions, generative artificial intelligence (Gen AI) fraud is changing how criminals create identities, impersonate account holders, manipulate documents, and target account opening processes today. As these threats become increasingly sophisticated, financial institutions must rethink how they detect fraud and verify identities without creating unnecessary friction for legitimate applicants during the account origination process.

MANTL and Alloy are helping financial institutions meet this challenge together.

As integration partners since 2017, the companies have processed more than 4 million applications and serve more than 175 shared financial institution customers. By combining MANTL Onboarding & Account Opening with Alloy’s AI-powered identity and fraud prevention platform, the partnership helps banks and credit unions identify suspicious activity earlier, automate identity verification, and make more informed decisions before accounts are opened.

The rise of AI-driven fraud: What banks and credit unions need to know

According to the Alloy 2026 State of Fraud Report, 71% of regional and community banks and 72% of credit unions reported an increase in fraud events in the previous year. Additionally, 91% of decision-makers said they are seeing more financial crimes committed with AI technologies. These findings underscore the urgency of strengthening fraud prevention as emerging technologies have increased the velocity of fraud attempts and make traditional attacks more personalized, believable, and scalable.

The most prominent AI-driven fraud threats include:

• Social engineering and phishing: AI can mimic writing styles and generate highly targeted messages directed at consumers. In the previous 12 months, there was a reported increase of more than 850% in malicious phishing emails.
• Synthetic identity fraud: Criminals combine real and fabricated information to create identities that can pass basic checks. AI can generate consistent personal details, supporting documents, and application narratives across multiple attempts.
• Deepfakes: Manipulated images, video, and audio can impersonate applicants or defeat identity-verification workflows, with deepfake attacks growing 2,137% since ChatGPT’s 2022 launch, from 0.1% of fraud attempts to 6.5%.
• Account takeover and authorized push payment fraud: AI-enabled impersonation can make it harder for account holders and team members to distinguish legitimate requests from malicious ones.

The Alloy 2026 State of Fraud Report also highlights differences in the threats facing banks and credit unions. Regional and community banks identified account takeover, synthetic identity fraud, and check fraud among their top fraud types, while credit unions cited synthetic identity fraud, account takeover, and authorized push payment fraud. Across both banks and credit unions, online banking, mobile banking, and in-branch interactions remain leading channels for fraudulent activity.

"AI has changed how fast fraud evolves, and banks and credit unions can’t wait on long integration cycles to respond. That’s why we built Alloy on open orchestration. With access to 300+ partner solutions, institutions can test and adopt the best new defenses as threats emerge, without rebuilding their stack or waiting on a single vendor’s roadmap."

— Parilee Wang, chief operating officer and chief product officer, Alloy

Why account opening is an attractive target for Gen AI fraud

Account opening is one of the first critical trust decisions in the account holder lifecycle for the applicant and financial institution. It is also a high-volume, time-sensitive process that spans digital, branch, and contact center channels. When identity and fraud signals are fragmented, fraudulent applications can slip through the front door, creating downstream losses, operational burdens, and potential reputational damage for the financial institution.

According to the Alloy 2026 State of Fraud Report, both regional and community banks and credit unions report detecting more fraud at the time of a transaction than during onboarding. This means that the fraud has already made it past the account opening stage, and creates a significant industry-wide opportunity to identify suspicious activity earlier, before fraudulent accounts are established and before any funds begin moving.

However, as AI makes fraudulent identities and documentation increasingly sophisticated, traditional verification methods that rely heavily on collecting and manually reviewing documents can introduce friction without necessarily delivering greater protection.

"For years, the industry has associated collecting more documents with stronger risk management. But as Gen AI makes documents easier to fabricate, financial institutions can no longer rely on paperwork as proof of trust. The future of fraud prevention is data-driven, leveraging trusted data sources and automated verification to stop bad actors without slowing down legitimate applicants."

— Benjamin Conant, chief product officer, Alkami

Rather than relying on documentation as the default, financial institutions can leverage connected identity, fraud, and existing account holder data to verify applicants more effectively, reserving manual review for cases that warrant additional scrutiny.

Best practices for combating Gen AI fraud

1. Start with a layered, multi-signal view.

No single data point can reliably identify an AI-assisted application. Financial institutions should combine identity, device, behavioral, document, consortium, and other relevant signals to evaluate the full context of an applicant rather than relying solely on basic identity matches. Machine-learning models can identify patterns and anomalies, while actionable AI features help teams triage threats, adjust policies, and respond in real time.

2. Automate document fraud detection.

Advanced tools can identify document tampering, inconsistencies, and forgeries that are difficult to spot through manual review. Financial institutions should also evaluate when trusted data sources can replace document collection entirely, reducing reliance on materials that generative AI can increasingly fabricate.

3. Use risk-based authentication.

Step-up verification, including identity document and liveness checks, can provide additional protection when an application presents elevated risk. Reserving these measures for higher-risk cases helps balance security with a streamlined account opening experience.

4. Create channel parity.

Applicants should receive a consistent standard of protection whether they open an account online, through a contact center, or in a branch. Connected account opening technology can help apply automated fraud checks across channels while reducing operational complexity.

5. Measure fraud prevention and business outcomes together.

Financial institutions should evaluate fraud prevention strategies against prevented losses, approval rates, false positives, time-to-decision, application abandonment, account growth, and customer and member satisfaction.

According to the Alloy 2026 State of Fraud Report, 92% of decision-makers at regional and community banks and 92% at credit unions said their fraud prevention strategies helped grow their businesses. Effective fraud prevention can support both stronger security and business performance.

How MANTL and Alloy are helping financial institutions stay ahead of emerging threats

Putting these best practices into action requires technology that connects fraud prevention directly to the account opening experience.

Through their long-standing integration, MANTL and Alloy help banks and credit unions bring together account opening, identity verification, and fraud orchestration into a more connected, automated process. Financial institutions can evaluate applicants using multiple risk signals, automate decisions, and apply additional verification when necessary.

Together, MANTL and Alloy help financial institutions:

• Strengthen fraud detection at account opening: Embed identity verification and fraud screening into account opening workflows to identify suspicious applications before accounts are booked.
• Automate identity verification and decisioning: Use connected data and risk signals to reduce manual reviews and accelerate decisions for eligible applicants.
• Apply risk-based verification: Dynamically introduce additional verification methods only when warranted rather than requiring every applicant to complete the same process.
• Support omnichannel account opening: Extend integrated fraud controls across digital and employee-assisted experiences.
• Future-proof against evolving fraud tactics: Support flexible fraud strategies and test new data sources as threats evolve, including those enabled by gen AI.

The partnership’s average automated application decision rate exceeds 80%, demonstrating how integrated fraud prevention and account opening can help financial institutions reduce manual intervention while maintaining risk controls.

"Market pressures are pushing community banks and credit unions to modernize how they acquire customers or members and open accounts. But every new digital launch or marketing campaign invites fraudsters to the front door. That’s why the MANTL and Alloy partnership matters. Fraud checks are built into account opening, so institutions can deliver a world-class experience to good applicants while applying the right amount of friction to real risk."

— Dustin Lubertazzi, vice president, banking, credit union & channel sales, Alloy

Fraud prevention is a growth decision

When fraud risk is uncertain, banks and credit unions may delay new products, limit digital acquisition, or introduce manual processes that slow legitimate applicants. When risk signals are connected and actionable, leaders can make faster decisions with greater confidence.

Fraud concerns continue to influence which products, features, and growth initiatives financial institutions pursue. This makes fraud prevention more than a security priority. It is a critical component of digital banking strategy, operational efficiency, and long-term growth.

The most effective response to AI-driven fraud is using better information to make smarter decisions.

By embedding fraud prevention into account opening, banks and credit unions can strengthen security, improve operational and cost efficiency, and deliver the fast, intuitive digital banking experiences that customers and members expect. Through their continued partnership, MANTL and Alloy are helping financial institutions achieve these goals while preparing for the next generation of fraud threats.