The Scamdemic is Real: Why Fighting Fraud is Fintech's Biggest Battle

As an embedded payments provider across the EU, we fight fraud 24/7. Deepfakes, synthetic IDs, phishing, good old social engineering—you name it, we've seen it. Its relentless

Fighting fraud is where we invest most, with 30% of our headcount dedicated to compliance and fraud related work. Millions of EUR in costs, tooling, reimbursements—it's an existential threat for a bootstrapped fintech like us. What has the world come to when a young growing company needs to allocate the biggest part of its budget to fighting financial crime.

The Scamdemic™️ is Real

It's always been bad, but the last 18-24 months have been brutal. Sweden's financial police report an 80% jump in investment fraud (2022-2023), and our internal data backs that up. Plus, anecdotally, my inbox and social feeds are flooded with scams.

I used to think, "Not me." Then someone tricked me by cloning a Uniqlo storefront, and nearly took my money. I was saved by Intergiro, who was the issuer in this case, but it hit home: anyone can fall victim. For the less tech-savvy, it's a nightmare—life savings at risk, or total digital paranoia. My dad is so untrusting of online payments that he needs one of our siblings to add his card to Uber.

Lets Define Some Categories

In general payment fraud and identity theft represent failures in our systems and tooling, so we take responsibility and cover the losses. That is not true of social engineering and investment fraud which are fiendishly hard for us to do anything about.

How Do We Beat This?

Social engineering and investment fraud are by far the most harmful, and hardest for us to stop, so lets focus on how we can combat those. Downstream fixes—regulations, punishing banks—are like mopping up a flood with a leaky roof. Necessary, but not going to stop the problem, so ultimately misdirected.

1. Social Media

75%+ of fraud starts on social media. We need to move upstream and put some pressure some on those platforms to act. Meta's FIRE partnership with UK banks is a good but tiny first step. Its weakness is that it puts the burden back on banks to report scams, not Meta to monitor its platform. And it's UK-only.

The EU's Digital Services Act (DSA) mandates action, but enforcement is fragmented. We need a unified approach, like a pan-European FIRE.

2. Public awareness: The Pandemic Playbook

Comparing the Scamdemic to a Pandemic is not as crazy as it sounds because the costs are actually quite similar. EU fraud (2020-2022): €157 billion. COVID costs: approx €464 billion. Fraud maybe 3x smaller but it never stops, so the cost from 2020 to today will be about this same, or even more. Fraud also hits consumers directly in their pockets, unlike COVID which will be paid off over many years.

The fist thing you do in a pandemic is initiate a massive public awareness campaign—handwashing, masks. We need the same for fraud. This could look something like this

• Basic Opsec (operational security) training — email is not secure and banks won't email you about your account. Bank wires can never be clawed back like card payments.

• Social media hygiene — be skeptical of ALL money-making schemes online, even those that seem to come from known public figures. "Stop. Think. Click” before taking action from one of these platforms.

• AI-powered due diligence training — AI tools offer a unique opportunity to check investment proposals fast. These tools are being used against People, but we need to turn the tables and teach people how to utilise these tools.

I’m no expert on this kind of campaigns but I could imaging it being implemented with interactive quizzes, ‘scam spotter’ toolkits and short engaging videos for the general public.

3. Collaboration beats isolation: Why fintechs need to join forces

This is a battle that no fintech can win solo. We urgently need industry-wide collaboration, pooling resources, insights, and tools securely and responsibly. Fintech must unite to share data and intelligence, making it significantly harder for fraudsters to exploit gaps. This isn’t about competition—it's about collective survival.

From the Trenches: Why fighting Fraud Needs All of Us

Take my perspective however you'd like, but I'm in the trenches fighting fraud every day. While fintech companies like ours are part of the solution, we can’t tackle this alone. Raising societal awareness is essential if we want to stem the tide. We're all in this together: Fintech can't fight fraud alone.