At Finovate 2025, fraud-focused fintechs demo the power of AI agents, behavioral science, and graph technology to fight financial fraud
A new cohort of fintech firms is determined to disrupt and eradicate financial fraud, in all its permutations.
That was the message at Finovate 2025 in New York, an annual conference where innovators in a range of fintech sectors came to display and demo their offerings and meet with potential clients and investors over a three-day period.
Among the Finovate participants highlighting their expertise in fraud and scam mitigation this year were Charm Security, Casap, Fideo Intelligence, and Scamnetic.
They were joined by representatives from financial giants, including American Express, Citibank, JP Morgan, and Visa, in search of innovation insights and potential partnerships.
The four startups provide a picture of new developments in the fraud mitigation arena, at a time when fraudulent activity impacting banks, credit unions, and fintechs has grown and become ever more sophisticated. As artificial intelligence is evolving, fraud’s technological and psychological complexity is also becoming more advanced.
“Fraud is evolving at the speed of generative AI, and it is leading to a massive explosion in the amount of fraud we are seeing in finance,” said James O’Toole, co-founder and chief business officer at ID-Pal, a Dublin-based identification verification platform that demoed at Finovate.
As a result, it should be no surprise, he said, that many fraud-focused firms were on display this year.
Fintech Nexus took a spin around the program for a deeper dive on a few of the fraud-focused firms that displayed their capabilities at the event:
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According to Roy Zur, a cybersecurity expert and co-founder of Charm Security, a New York-based fraud prevention and resolution provider, fraudsters are far less likely to try to hack into your bank account these days.
The focus now is to “hack” your brain, employing Gen AI to get you – the consumer – to take an action that advances a fraud.
“It’s so much easier to deceive people today,” Zur said, with hackers using Gen AI “to generate text, voice, and deep fakes.” They then deploy these deceptions to get people to transfer money or give up valuable personal information. Thus, Zur said, “we need to fight these AI strategies with AI.”
The firm trains AI agents that can be used by a bank’s fraud team to understand the human vulnerabilities that hackers now consistently exploit.
“The agent basically operates like a psychologist or behavioral scientist,” to understand how people might be manipulated and to disrupt and block any social engineering that may occur. “We call this breaking the scam spell,” that has deceived or charmed a person, Zur said, and hence, the name of the firm, Charm Security.
The company is taking it a step further, withAI agents trained to help customers by providing patient, emotional support and guiding them to a resolution.
“We help them understand what they need to do in terms of preparing evidence or working with law enforcement,” he said. The platform can connect them with a non-profit that provides access to a network of clinicians to provide emotional support. “For victims of scams, there can be a high level of emotional stress,” said Zur, and Charm Security aims to help resolve that problem as well.
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Shanti Shanmugam, the founder of Casap, a New York-based fintech, noted that banks and credit unions hate having to deal with credit and debit card disputes. Not surprisingly, their customers don’t like the process either.
Shanmugam is determined to fix the problem.
Her three-year-old startup offers an AI-powered dispute platform that automates the investigative process and functions as a transparent system of record for what is traditionally a time-consuming and fragmented process.
“Before Casap, it would take 90 days to resolve a dispute, given how archaic and siloed systems are today at the average bank,” and with many banks outsourcing the task to processors, said Shanmugam.
She added: “Our platform is asking the sort of questions that the best fraud investigator would ask…we are automatically filing chargebacks on the network instead of waiting days…and when a merchant says they are not going to give money back to a customer, our technology can be a chargeback agent, cutting down handling times.”
The result, she said, is Casap’s ability to offer a quick resolution to honest customers, identifying and blocking fraud when it occurs, helping teams resolve cases faster, and helping to build consumer trust.
Behind this is first-party fraud – e.g., fraud where an individual claims a credit card purchase is fraudulent in order to get a refund – is on the upswing, projected to reach $3.9 billion in 2025, according to Datos Insights.
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With the rise of AI-powered fraud, synthetic identities, and ever-evolving and changing consumer behavior, Fideo Intelligence – a one-year-old fintech –said its platform is uniquely designed to address the challenges at hand.
“Tools at the fingertips of fraudsters today have never been more advanced,” said Christopher Harrison, CEO of Fideo. As a result, banks require identity verification tools that are very dynamic – designed to assess real-time, not static data – and proceed to identify real-time data patterns.
Thanks to its three patents – one is a relationship graph patent, another is an entity relationship patent, and a third is an information cataloging patent – the
Via the platform’s access to real-time telecom data and billions of data points, it maps intricate relationships between entities to achieve a contextual understanding of how all entities are associated. It then retrieves, stores, and analyzes all structured and unstructured data that may make up an individual’s digital footprint.
Harrison explained that the Fideo platform focuses on eight categories of fraud detection, including synthetic identity detection, email risk modeling, and digital footprint analysis, while connecting billions of identity signals derived from public, private, and deep web data, financial institutions, ecommerce, call centers, web events, and app usage.
The benefit of all this AI-powered activity, said Harrison, is that the Fideo system allows a bank’s fraud team to quickly conduct robust checking, gain a holistic view of identifying risk, and then knock out fraud quickly.
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When Al Pascual worked at credit reporting agency TransUnion as an enterprise solutions lead, he saw how hurtful scams could be.
Now that he’s CEO and founder of Scamnetic, a Tampa, Florida-based scam- fighting fintech founded in 2023, he’s pleased to be in the thick of the scam challenge, providing a broad-based, technology and people-powered solution.
The firm employs both AI and patented machine learning technology to detect, prevent, and respond to scams, but also offers human assistance for scam resolution, as well as online scam education for consumers and fraud teams at fintechs and banks.
“When a scam occurs, banks are not legally obligated to make the customer whole. And yet when people get scammed, 7 out of 10 will reach out to their financial institution for help,” Pascual notes. “More often than not, the relationship becomes acrimonious, and one in five victims just leave the institution altogether.”
“Our goal is to create a dynamic where the consumer is better protected and less likely to have to call an institution. Instead, when this service is employed, they feel like the institution is helping to keep them safe and will stay engaged with the institution.”
Scamnetic’s KnowScam product provides a spectrum of services: It scans email and text messages along with QR codes, links, physical mail, and images to understand the risk from any incoming communication. Its identity verification capability instantly verifies the identity and validity of any counterparty, whether it’s a deepfake video, audio, or text.
Finally, its scam intervention service connects consumers with Department of Justice-trained scam experts who can help to try to restore assets and guide victims to recovery, while its scam education offering helps to keep both consumers and bank fraud teams up-to-date on the latest scam trends.
The company is also set to participate in the Mastercard Start Path Security Solutions Program. The arrangement comes not too soon, as Pascual notes: “Scams are the most reported crime on earth.”
