Why Fraud Risk is Different Between Credit Unions and Banks

Credit unions and banks face many of the same fraud threats, but the impact can be very different. Auriemma Roundtables’ new whitepaper includes industry benchmark data that reveals the disproportionate impact of fraud risk.

While major bank losses often dominate headlines, credit unions are facing many of the same fraud attacks while being less equipped to respond.

That dichotomy is the focus of Auriemma Roundtables’ new whitepaper, Same Threats, Higher Stakes: Fraud Risk at Credit Unions. It explores how fraud risk is evolving across institution types, why similar fraud pressure can lead to very different outcomes, and where peer benchmarking can help fraud leaders identify blind spots.

Credit Unions Face Distinct Fraud Challenges

Credit unions are facing many of the same fraud threats as banks, but Auriemma Roundtables benchmark data shows the impact can be disproportionate. While credit unions and banks saw nearly identical increases in gross fraud losses per DDA by year-end 2025, credit unions experienced a much sharper rise in net fraud losses.

That gap suggests the challenge is not just fraud volume. It is what happens after fraud enters the system. When suspicious activity is detected later, recovery is less effective, or losses are absorbed to protect member relationships, more fraud can become realized loss.

For credit unions, that dynamic may be compounded by leaner teams, fewer specialized resources, and less access to third-party data.

Fraud Is Getting Harder to Identify Early

Fraudsters are becoming more sophisticated at making applications, identities, phone numbers, and account behavior appear legitimate. That makes early detection harder, especially when risk signals are evaluated in isolation.

A new account may look clean at the point of opening, only to show suspicious behavior once it is funded, digitally activated, linked to external accounts, or used across payment channels. In other words, fraud that can make it past the initial guardrails has the potential to do the most damage.

Fraud risk does not stop at application approval. Account funding, debit card issuance, digital enrollment, external account linking, authentication changes, and non-monetary activity can all provide important clues.

The whitepaper discusses how fraud tactics are becoming more blended across identity, account opening, account takeover, scams, and first-party activity. It also looks at why consistent classification and peer comparison are becoming more important as institutions try to understand where losses are coming from and how to respond.

Similar Fraud Pressure Does Not Always Mean Similar Outcomes

Fraud leaders often track internal losses, claims, disputes, and account closures. Those metrics are essential, but they do not help a leader know whether the institution is performing better or worse than peers.

Auriemma Roundtables’ benchmarking shows that banks and credit unions may experience similar levels of fraud pressure while seeing different results after investigation, recovery, reimbursement, and loss mitigation processes have played out. For credit unions, the key question is not only how much fraud is entering the system, but how much of that fraud ultimately becomes realized loss.

Why Peer Benchmarking Matters

Fraud leaders can see fraud claims, account closures, and operational strain within their own institutions, but whether those patterns are part of a broader market shift or evidence of a control gap can be harder to assess.

Peer benchmarking gives institutions the context needed to make that distinction. It helps fraud teams understand where they stand, where losses may be emerging, and where practices may need to evolve.

For credit unions, that context can be especially valuable. With fewer resources to deploy, leaders need sharper visibility into which risks deserve immediate attention.

About Auriemma Roundtables Benchmark Studies

Auriemma Roundtables Benchmark Studies give financial institutions a peer-based view of performance, risk, and operational trends that internal reporting alone may not reveal. For fraud teams, that context can clarify whether loss trends, claim activity, account closures, or recovery challenges are isolated issues or part of a broader industry shift.

For more information on the Fraud Benchmark, contact Jared Kirby, or learn more here.