The $255B Wake-Up Call: Organized Crime's Digital Transformation
The New Face of Organized Crime & Financial Fraud
I got three scam calls and texts yesterday. One was about my house insurance warranty (I don't own one), another about student loan forgiveness (already paid off), and a third claimed to be an IRS refund (I wish). But these annoying calls and texts are just the tip of a massive transformation in organized crime. Today's criminal enterprises aren't just about financial fraud—they're running sophisticated operations across every sector. They're using AI to create deepfake videos for extortion, exploiting squatter laws to take over homes in NY and LA, and moving stolen cars to overnight shipping containers.
Our latest work with Alloy, Alloy’s 2025 State of Fraud Report, highlights how organized crime has gone agile: these aren't street gangs anymore—they're professional organizations with business models, tech stacks, and operational efficiency that would make a startup jealous. And nowhere is this transformation more evident than in financial fraud, where criminal enterprises have turned scamming into a structured, scalable business operation.
The Corporate-ization of Crime
The stat that loops in my mind is from this work is—> 71% of fraud professionals agree that most fraud attacks in 2024 were committed by organized criminal enterprises, not individual bad actors.
The scale of this shift becomes even more apparent when you look at the pandemic-era PPP loans. What was initially estimated as a $100 billion fraud problem has ballooned to $255 billion in losses, according to the latest U.S. House Select Subcommittee report. That's not just money disappearing—it's capital being funneled directly into criminal organizations that are now systematically targeting financial institutions.
"In the last four years, we saw a massive uptick in organized financial crime," explains Alloy CEO Tommy Nicholas. "At first glance, it can look like a regular person woke up one day and decided to commit a crime. Understanding that most fraud is actually coming from organized crime rings has caused a big shift in how the financial services industry fights bad actors."
Fraud-flation is Coming
Fraud-flation is real, and the numbers prove it. Our research shows a relentless upward trend: 60% of financial institutions saw fraud rise across both consumer and business accounts in 2024, with 31% losing over $1 million to direct fraud. Enterprise banks (those with more than $50B in assets) have been hit hardest, with nearly 70% reporting increased fraud events. These aren't just statistics—they're a warning sign that fraud losses are scaling up faster than our defenses.
The AI Arms Race
Perhaps most intriguing is how this forces a technological evolution in financial security. While 93% of financial organizations believe AI will be game-changing for fraud detection, there's a growing recognition that we need to move beyond the hype to practical applications.
As Nicholas puts it, "This year will see fewer overhyped promises about AI and more tangible applications of machine learning to address fraud in real-time." It's not about standalone AI tools anymore—it's about integrated platforms that can track and respond to identity and fraud risks across entire organizations.
Why This Matters
Our obsession with digital convenience has created vulnerabilities that organized crime is exploiting at unprecedented scale. The $255 billion lost to pandemic-era fraud has funded a new generation of sophisticated digital attacks, forcing us to confront an uncomfortable truth: we need to sacrifice some convenience for security.
This shift is already happening at the highest levels. The U.S. Cybersecurity and Infrastructure Security Agency (CISA) has introduced the Secure by Design Pledge, pushing organizations to prioritize security in their core operations rather than treating it as an afterthought. When 90% of financial institutions are now investing equally in physical and digital security, it signals that the industry recognizes the scale of this threat.
As 62% of organizations ramp up their fraud prevention investments under regulatory pressure, one thing is clear: no single institution can fight this battle alone. Digital organized crime has evolved beyond the capabilities of any individual organization to combat it. While initiatives like CISA's Secure by Design show promise, we're still in the early stages of understanding how financial institutions, government agencies, technology providers, and consumers can work together effectively in this new landscape. The challenge ahead isn't just technical—it's about reimagining how we collaborate to protect our digital economy.
Big shout out to Tim Osiecki and Esther Kwon, who led this report, along with our strategic partners at Ally.
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Penned by Libby Rodney and Abbey Lunney, founders of the Thought Leadership Group at The Harris Poll. To learn more about the Thought Leadership Practice, just contact one of us or find out more here.
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