Fraud is evolving. So are we.

By Colin Barrett
President/CEO, Tennessee Bankers Association

There is no shortage of change in our industry today, but fraud is one particular challenge that continues to evolve in ways that require our constant attention.

Not long ago fraud was often local, opportunistic, and easier to identify. Today, it is global, coordinated, and increasingly sophisticated. Criminal networks, both at home and abroad, are leveraging new technologies, mimicking trusted relationships, and exploiting moments of distraction or urgency. And the rapid advancement of artificial intelligence is accelerating these threats.

The reality is simple: this is not a problem we can “solve.” Instead, it is a challenge we must continuously fight.

This why the Tennessee Bankers Association has made fraud prevention a priority by working alongside banks, law enforcement, and policymakers to stay ahead of constantly shifting threats.

At the federal level, there is growing recognition that more tools are needed to combat scams costing Americans billions each year. Legislation like the SCAM Act reflects an important shift—acknowledging that fraud is no longer confined to banking, and that progress requires coordination across financial institutions, telecommunications providers, and law enforcement.

We also continue to address traditional forms of fraud, particularly check fraud, which is a significant challenge for banks. While the tactics may feel familiar, the scale and coordination behind these schemes are anything but. Criminals are exploiting timing gaps, altering checks with new technology, and moving funds quickly across institutions before fraud can be detected.

That reality was highlighted in Washington when Gay Dempsey, CEO of Bank of Lincoln County, testified before the House Financial Services Subcommittee on Financial Institutions. Her testimony emphasized the challenges banks face in fighting fraud and the leadership role

Tennessee bankers play in shaping solutions.  Her message was clear: community banks are on the front lines of this fight and need the tools, flexibility, and coordination to respond in real time.

While Washington debates the policies regarding fraud, meaningful action is happening closer to home.

Here in Tennessee, TBA has worked with lawmakers over the years to advance measures to give banks more flexibility to protect their customers against fraud. Most recently, we successfully supported legislation to ban crypto ATMs—machines that have become a growing conduit for fraud, particularly among vulnerable populations. These transactions are often irreversible and occur under pressure from scammers creating a false sense of urgency.

We also led efforts to pass legislation allowing banks to pause suspicious transactions and, when appropriate, contact a trusted family member or third party. Sometimes, the most important step is simply slowing a transaction down long enough for bankers to educate their customers.

Equally important is our partnership with the Tennessee Bureau of Investigation, which codifies coordination between banks and law enforcement when fraud is suspected. Banks are often the first line of defense, but we are most effective when we are connected to those who can act quickly.

TBA’s legislative accomplishments in fighting fraud are the direct result of feedback we’ve received from bankers on ways the law could be updated to better equip banks.  Continued feedback is vital to ensure we stay up to date.  

Even with these efforts, the environment is only becoming more complex.

Artificial intelligence is already being used to generate convincing phishing emails, clone voices, and create highly personalized scams at scale. Emerging technologies—like platforms such as Mythos—have the potential to further accelerate and refine these attacks. That does not mean our systems become defenseless, but it does mean the margin for human error continues to shrink.

And that may be the most important takeaway.

Fraud prevention is no longer just about systems and controls. It is about people—training them, supporting them, and giving them the authority to act when something doesn’t feel right. It is about creating a culture where questioning a transaction is encouraged. And it is about ensuring customers understand the risks they face in an increasingly digital world.

For banks, this means continued investment in both technology and education. For policymakers, it means ensuring frameworks keep pace with evolving threats. And for TBA, it means staying engaged on all fronts—advocating for better tools, facilitating collaboration, and sharing information across all networks.

Fraud will continue to evolve. Technology will continue to advance. And bad actors will continue to adapt.
But so will we. Fraud may never sleep. But neither do the bankers working every day to protect their customers and communities. And that work has never been more important.