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Financial technologies like online payments, peer-to-peer transfers, and digital banking offer major convenience for consumers – but also cybercriminals. According to Alloy’s 2025 State of Fraud Report, 80% of all fraud events occurred on online or mobile banking channels, and 60% of fintechs say they’ve encountered an increasing number of fraud attempts over the past year.
Account takeovers (ATO), credit card fraud, and identity theft are just some of the types of fraud dominating headlines, and they’re also the most common types of fintech fraud, according to the Alloy study. These methods have one thing in common: in most cases, phishing is used as the initial breach point. Often, attackers mimic trusted brands or individuals to trick victims into giving out their sensitive information, including banking credentials, personal data, and payment details.
For businesses, the risk is too great to ignore, as every employee is a potential target. For that reason, we’d like to discuss the power of phishing simulation as a practical and cost-efficient way to help employees recognize online scams and significantly reduce the risk of fintech fraud.
Phishing simulations are ideal for dynamic threats
Given the dynamic types of fraud targeting the sector, generic security courses simply don’t cut it for fintech organizations. Employees need targeted, hands-on experience that mirrors the specific scams they are likely to face in their day-to-day roles.
Thanks to their flexibility, phishing simulations can deliver tailored training powered by real-world threat intelligence, so that employees receive simulations that feel immediately relevant to every role.
For example, the accounts payable department is most likely to face fraud related to fake invoices or urgent wire transfer requests. The tactics in these scams are always evolving, so regular phishing simulations are the only way to reliably train the AP department to be vigilant in spotting the subtle red flags. Similarly, customer support teams should receive credential harvesting simulations masked as password reset requests.
The power of immediate feedback
Employees in the fintech space work in fast-paced environments where they make split-second decisions under pressure. This is precisely the type of environment cybercriminals like to target with phishing. However, phishing simulations also capitalize on the fast-paced nature of fintech work by delivering instant feedback the moment a simulated attack unfolds.
If an employee clicks on a phishing link, they immediately get an on-screen alert explaining what they missed, followed by a brief, focused micro-learning module to reinforce the red flags. On the other hand, if an employee correctly identifies and reports a simulated phishing attempt, they receive instant praise and positive reinforcement.
To keep engagement high and learning progressive, many programs layer in gamification elements, such as leaderboards to track reporting rates or digital badges to reward top performers. This feedback structure performs better than traditional, one-off awareness sessions, because it embeds the learning elements at the moment of risk, improving knowledge retention and reinforcing positive behavioral changes.
Data analytics for continuous improvement
If there’s one thing that all fintech companies share, it’s a love for data and numbers. Phishing simulations generate a wealth of data that organizations can use to regularly measure and improve the effectiveness of their security program. By tracking key metrics like click-through rates, report rates, and department vulnerability profiles, organizations can get a clear picture of their phishing exposure and can pinpoint exactly where to focus their improvement efforts.
Fraud and cybersecurity teams can use this data to correlate phishing simulation performance with live attack trends. An uptick in account takeover (ATO) attacks would be a great time to launch a focused “password reset” phishing drill, for example, to reinforce defenses where needed most.
On top of all the decision-making benefits, security teams can also use the data they gather to demonstrate value to stakeholders. Dropping click rates mean that the program is working and the investment is paying off.
Aligning with Compliance and Regulatory Standards
Fintech is one of the most tightly regulated sectors in the world. Nearly all universal data protection regulations apply, on top of a few finance-specific ones, including PCI DSS, PSD2, FFIEC, and the recently introduced DORA.
Many of these standards directly require employee awareness training as a core element of an organization’s risk management strategy. Phishing simulations satisfy and even exceed those training requirements. Even in regulations that don’t explicitly spell out “employee training,” the detailed records these exercises produce serve as powerful proof points.
When auditors or potential partners and clients ask for evidence of ongoing fraud risk management, you won’t have to point them to generic training slides they can’t verify as being used. Instead, you’ll have a time-stamped report showing exactly what training was conducted, and the performance of all participants.
Conclusion: Strengthening the Human Firewall
Fintech fraud is a constant threat to every business participating in the digital economy. Since phishing is the method in which most fraud types start, organizations must work on strengthening their human firewall so that employees can spot fraud attempts.
By integrating realistic, role-based simulations into your training program, you can transform every employee from a target to a reliable first line of defense. The earlier you start, the safer your organization becomes.
The post How phishing simulations help curb trending types of fintech fraud appeared first on Fintech News.
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