The impact of digital transformation
The investments industry is rapidly digitalising to meet consumer demand for instant access, transparency, and convenience. While this enhances user experience, it also opens new doors for fraudsters to exploit vulnerabilities in systems and data.

The shift to digital has introduced new fraud vectors such as compromised identities, account takeovers, and credential stuffing often powered by data harvested from breaches or social engineering. The LexisNexis® True Cost of Fraud™ Study (2023) showed that, 72 percent of businesses prioritised integrating digital and customer experience operations with fraud prevention efforts in the past year, highlighting the growing need to align security with user experience.

Fraudsters are increasingly using AI tools to mimic legitimate communications, making scams harder to detect and easier to scale. The LexisNexis® Global Cybercrime Report (2025) revealed that one in 11 new account creations are attacks, making onboarding one of the highest-risk steps in the customer journey, especially on financial mobile apps.

Investors expect their investments to be safe, but also demand real-time access to their portfolios, personalised insights, and frictionless digital experiences. To meet these expectations, investment firms must collect, store, and process vast amounts of sensitive data, making security and trust more critical than ever.

The challenge is finding the right balance: delivering intuitive, high-quality user experiences while ensuring that every interaction is secure. As digital engagement grows, so does the pressure on firms to prove they can protect client data, prevent fraud, and maintain the trust that underpins long-term relationships.

Why investments are an attractive target
Investment platforms are increasingly attractive to fraudsters due to the high-value nature of assets and the frequency of fund movements.

As investment management firms strive to deliver fast, frictionless onboarding and digital-first experiences, especially for high-net-worth clients and younger investors, they often face a trade-off between convenience and security. The True Cost of Fraud™ Study revealed that 54 percent of businesses experienced an increase in scams over the past year, with 21% or more growth in scam activity for one in five firms.

This surge reflects how fraudsters are adapting to exploit gaps in identity verification and authentication systems. As firms race to onboard clients quickly and reduce friction through a digital channel, they risk overlooking robust identity verification and fraud detection protocols. This can open doors for the likes of impersonation scams, phishing attacks, and synthetic identity fraud. As fraud tactics continue to evolve, firms must rethink how they balance user experience with robust fraud prevention, ensuring that trust is built into every step of the digital journey.

Types of fraud to watch for
Investment platforms face a wide array of fraud threats, including Identity theft, account takeover, and synthetic identity fraud, especially as fraudsters gain access to breached data from other sectors. The likes of credential stuffing is fast growing concern, where bots test stolen usernames and passwords across multiple platforms.

Phishing scams are also becoming more sophisticated, as fraudsters now use AI to craft convincing emails and messages that mimic legitimate financial communications. These scams often target high-net-worth individuals, tricking them into transferring funds or revealing sensitive information.

As investment platforms scale and attract more users, the volume of traffic and data they handle will increase exponentially, putting pressure on authentication systems and making early fraud detection more critical than ever, underscoring the importance of building an end-to-end KYC and due diligence solution that can adapt to these threats.

Ready to dive into the report and discover more about LexisNexis® Risk Solutions’ showcase? You can read and download the report online here.

The role of regulation
The regulatory landscape for investment firms is undergoing significant change, with heightened expectations around fraud prevention, anti-money laundering (AML) compliance, and sanctions enforcement. In September 2025, the UK introduced the Failure to Prevent Fraud offence, increasing corporate liability for financial crime.

This reflects a broader global trend towards stricter compliance measures, as seen in the UK’s expanded sanctions regime and the EU’s new directive establishing common penalties for sanctions violations. Regulators are intensifying their focus on economic crime, prompting firms to reassess their compliance frameworks to mitigate risk and meet evolving expectations.

The UK’s Economic Crime Plan 2023-2026 outlines key reforms, including changes to Companies House, enhancements to AML regulations, and a greater emphasis on asset recovery through international cooperation. These initiatives underscore the urgency for firms to adopt more robust compliance processes.

Traditional manual due diligence and fragmented risk assessment tools can leave firms vulnerable to oversight errors and regulatory penalties. Instead, adopting real-time risk decisioning and advanced screening techniques can help firms identify financial crime risks more efficiently.

Customer experience considerations
The investment market is more competitive than ever and customer experience is the key to standing out. Clients demand seamless, secure digital journeys, especially during login, where friction can quickly lead to abandonment. Layered authentication is essential for mitigating fraud, but excessive complexity risks frustrating users and damaging trust.

Striking the right balance between security and convenience is key. This approach allows low-risk customers to enjoy streamlined access while applying stronger controls only when necessary. By integrating adaptive authentication into the login process, firms can protect against fraud without compromising the intuitive, fast experience customers demand. Ultimately, delivering security that feels invisible is not just a compliance requirement — it’s a competitive advantage.

Fight fraud at every stage of the customer journey
To strengthen fraud prevention across the customer journey, investment firms should adopt a layered risk management strategy that enhances detection without negatively impacting the customer experience.

While no solution can eliminate fraud entirely, firms can significantly improve detection and response by integrating multiple signals across the customer journey. This can be done by combining technology, behavioural insight, and collaborative intelligence.

By linking machine learning-powered analytics, digital identity intelligence, and behavioural biometrics, firms can build a dynamic risk assessment framework that adapts in real time. This includes detecting bots and credential testing attempts at login, identifying unusual behaviour during account setup and applying the right level of friction based on risk, ensuring genuine investors can access their accounts.

Alongside the layered approach, joining fraud intelligence networks or consortiums allow for anonymised data sharing across the industry. The banking sector is already leading the way with shared intelligence and other sectors including investments can replicate this approach to protect their firm and their customers. These networks help identify emerging threats and enable firms to proactively defend against fraudsters using shared insights and behavioural patterns.

Equally important is the need for ongoing vigilance and collaboration. Firms should conduct regular data audits to ensure customer information is accurate and up to date, reducing the risk of identity manipulation.

Finally, education also plays a critical role, where both investors and staff must be trained to recognise fraud risks and respond appropriately, especially as the Failure to Prevent Fraud act is now in place, where large organisations can be held criminally liable if they do not have reasonable procedures in place to prevent fraud.

Interested in reading the Future View Toolkit 2025? You can read and download the report online here.

About the Future View Toolkit 2025
The Future View Toolkit 2025 focuses on the ways in which the wealth management industry across the world is future-proofing itself amid technological change, increasing compliance demands, advanced client expectations, and new operational models.

It features contributions from a total of nine industry participants, all bringing different perspectives to the challenges and opportunities that come with the future-proofing of this sector. Among these are six contributors from technology vendors, who have each contributed a topic-focused Showcase profiling an individal solution.

Our broader Toolkit Report Series covers thematic, geography and wealth manager segment-focused reports, each tasked with delving into the topics and supporting technologies of relevance to help wealth managers of all types better understand how they should bring technology into their business and in which areas.

About The Wealth Mosaic
The Wealth Mosaic is a UK-headquartered online solution provider directory and knowledge resource, focused specifically on the wealth management industry.

For wealth managers, the buy side of our marketplace, The Wealth Mosaic is designed to enable discovery of key solutions, solution providers and knowledge resources by specific business needs.

For solution providers and vendors, the sell side of our marketplace, The Wealth Mosaic exists to support the positioning, exposure and business development needs of these firms in a more complex and demanding market.

For more information, visit: www.thewealthmosaic.com

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