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Banks and credit unions prioritize AI for fraud detection but pace deployments cautiously as leadership cites data handling accuracy gaps and legacy compatibility alongside privacy and security hurdles

September 2, 2025 //  by Finnovate

Banks and credit unions are universally worried about fraud, but are also concerned that security tools don’t adequately protect underlying data. For Flushing Financial’s John Buran, the benefits of bank automation are clear, but so are the fears.  The CEO of the $8.8 billion-asset Flushing Financial told American Banker that automation systems are poised to oversee “vast amounts of personal and financial data,” but create questions surrounding “consent, data handling and storage.” “Although automation brings efficiency and innovation benefits, the concerns about data security and privacy risks in banking automation are in my opinion well founded and should remain a critical area for continuous focus and improvement,” Buran said. Buran is not alone. Worries about data security and privacy are holding many back from using advanced automation such as artificial intelligence, according to new research from American Banker.  “Fraud teams are already overwhelmed by the number of alerts they are investigating, so many have to focus on the high-dollar losses and manage lower-dollar losses through their dispute processes,” said John Meyer, managing director in Cornerstone Advisors’ Business Intelligence and Data Analytics practice.

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Category: Cybersecurity, Innovation Topics

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