The rise of artificial intelligence (AI) has revolutionized financial services — but it has also supercharged fraud. Criminals now use generative AI to create deepfakes, forge documents, and carry out highly convincing phishing attacks. Fraud losses in the U.S. alone hit $12.5 billion in 2024, underscoring the scale of the problem.
At the center of this battle is Plaid, the fintech giant that connects thousands of banks with apps like Venmo, Coinbase, Robinhood, and SoFi. With financial ecosystems under threat, Plaid is deploying AI to fight AI—and its latest strategy may set a benchmark for the entire fintech industry.
The Growing Threat of AI-Powered Fraud
Rising Fraud Losses
- In 2024, U.S. fraud losses surged to $12.5 billion, a 25% increase from the previous year.
- In the UK, over £1 billion was stolen, with 3.3 million incidents involving scams powered by AI deepfakes and voice cloning.
- Fraudsters now use AI for phishing campaigns, identity theft, and bypassing outdated security systems.
🔗 Read more on AI fraud trends
Plaid: The Backbone of U.S. Fintech
Founded in 2013, Plaid is a financial data network powering apps like Venmo, Robinhood, and Coinbase. It connects users to more than 10,000 financial institutions and is used by one in two Americans.
This scale makes Plaid uniquely positioned to track fraud trends across devices, accounts, and financial platforms—giving it an edge in deploying AI-driven fraud detection.
Plaid’s AI Defense Strategy: “AI vs AI”
Plaid Protect: Real-Time Fraud Intelligence
Plaid recently launched Plaid Protect, a fraud detection engine powered by Trust Index (Ti), which analyzes thousands of risk signals across billions of devices.
- Detects synthetic IDs, account takeovers, and first-party fraud.
- Uses machine learning to assess user trustworthiness in real-time.
- Requires no additional data from apps, reducing integration complexity.
🔗 Plaid Protect official announcement
Enhanced Identity Verification (IDV)
Plaid also upgraded its identity verification system with AI-driven features:
- Deepfake detection for video and photo fraud attempts.
- Facial duplicate detection with 1-in-a-million false match accuracy.
- Selfie re-authentication and age estimation for sensitive accounts.
These features help businesses block fake accounts and reduce onboarding fraud.
Culture of AI Readiness
Plaid isn’t just deploying AI—it’s training its entire workforce. CEO Zach Perret has emphasized that all engineers are being trained in AI tools, ensuring Plaid remains ahead of fraudsters who increasingly use generative AI.
He describes fraud prevention as a “cat-and-mouse game”, where only AI can effectively combat AI.
Why Plaid’s Strategy Matters for Fintech
- AI Arms Race: Fraudsters now use generative AI, demanding equally advanced detection.
- Cross-Network Defense: Unlike siloed systems, Plaid sees fraud patterns across institutions.
- Real-Time Protection: With platforms like FedNow enabling instant payments, fraud detection must happen in milliseconds.
- Regulatory Alignment: AI-driven fraud tools must also remain transparent and compliant with global ethical AI frameworks.
🔗 How optimized AI reshapes fraud detection
What This Means for Businesses
For fintechs, banks, and startups, Plaid’s defense strategy shows that fraud prevention is no longer optional—it’s mission critical. Businesses should:
- Deploy AI-powered fraud tools that adapt in real time.
- Build layered identity verification with deepfake detection.
- Train teams in AI adoption and fraud awareness.
- Ensure compliance with responsible AI frameworks.
Codek’s Perspective
At Codek Technologies, we believe Plaid’s approach offers valuable lessons for fintech innovators worldwide.
We help businesses:
- Build AI-driven fraud detection systems tailored to their needs.
- Integrate secure onboarding and KYC workflows.
- Design mobile-first fintech platforms with trust and compliance at the core.
- Stay ahead of AI-powered fraud by adopting real-time security intelligence.
Ready to protect your fintech business against AI fraud?
Contact Codek Technologies and let’s build secure, scalable solutions together.
Final Thoughts
Fraud is evolving—and so must financial institutions. Plaid’s AI vs AI strategy highlights the future of security in fintech: adaptive, real-time, and deeply integrated into digital ecosystems.
For fintech players, the choice is clear: adapt now, or risk being left behind in the AI fraud era.