It’s no secret to any banker that fraud is a problem. Still, some of the latest numbers have been sobering, to say the least:
60% |
$4.36 |
80% |
of FIs reported an increase in fraud in 2025 |
Cost to FIs for every $1 of fraud loss |
of mid-market FIs have experienced fraud via online/mobile channels |
Account holders need robust protection from fraud. But they also demand convenient and seamless banking experiences, particularly in their online and mobile channels. Too often though, increased fraud protection has meant increased complexity for end users.
And as today’s banks and credit unions strive to modernize and engage at every turn, they’re left asking an impossible question, “Should I prioritize security or customer experience?”
At CONNECT25, Q2 sat down with fraud prevention partner, Alloy, to discuss why it doesn’t have to be a choice.
Setting the Stage: The Dogsitter Dilemma
Alloy’s Chief Product Officer, Parilee Wang, opened the session with a clear message: fraud prevention and customer experience don’t have to be opposing forces. “We care about both,” she emphasized. “We don’t think in terms of choosing one over the other.”
To bring that tension to life, Wang shared a personal story about paying her dogsitter. The sitter requested payment via Zelle, a service she rarely used. Because of that, her bank flagged the transaction as suspicious.
“The bank was trying to protect me,” she said, “but it ultimately took four phone calls to convince them it was legitimate.”
It was the perfect illustration of the problem at hand. While the intent was right, the customer experience was just plain painful.
The Q2–Alloy Partnership
This is where Q2 and Alloy’s partnership comes in. And as the panelists explained, it’s not a typical vendor relationship. Over the past year, Q2 and Alloy have been co-building a deeply integrated solution designed to function like a “central nervous system” for fraud defense.
Instead of siloed tools, this system unites real-time event data and automated workflows. The goal? Stop bad actors faster while also allowing legitimate transactions to go through without delay. Here’s a hypothetical scenario that demonstrated how the Alloy-Q2 solution works in practice.
Balance in Action
The example centered on something simple but high stakes: updating a phone number on an account.
In the first scenario, a real customer initiated the update. By tapping into Q2’s event stream data and validating against third-party sources, Alloy could instantly verify that the new number belonged to the customer. With multifactor authentication layered in, the request was approved in real time, creating a smooth, secure experience.
The second scenario showed what happens when fraud is attempted. The system quickly flagged that the new number had no real connection to the customer and that the IP address was suspicious. Rather than letting the request slip through, the workflow denied it instantly, stopping the bad actor before any damage was done.
Supporting Front-Line Teams
But while protecting customers will always be a top priority, the panelists stressed that it’s equally vital to support the teams on the front lines of fraud prevention.
As Q2 Senior Product Manager Gabe Norris put it, “Q2 and Alloy isn’t a first-date partnership. It’s deep, transparent, and designed for agility.”
Traditionally, investigating a suspicious transaction has often meant hopping between multiple systems, piecing together fragments of data, and spending hours on manual work. That not only slows down customer resolutions, it also puts significant strain on fraud teams.
By comparison, the Q2–Alloy solution provides what the speakers called a “single-pane-of-glass” experience. Analysts can see every event tied to a transaction and access a full customer profile in one place, enabling them to resolve issues quickly and confidently. The result is greater efficiency, less team burnout, and better outcomes for customers.
“We can’t keep asking teams to miss dinner and fight fraud manually. We need future-proof agility,” Wang added.
With integrated, automated workflows replacing siloed, manual processes, financial institutions are better equipped to handle today’s fraud, and to prepare for what’s coming next.
The Solution Roadmap: Built for Agility
While reviewing a forward-looking roadmap for the Q2–Alloy solution, both oth teams emphasized there is no finish line in fraud prevention. Threats will continue to evolve, and so must the tools designed to stop them. That’s why agility and continuous iteration are built into the very foundation of the partnership.
The roadmap is focused on reducing friction for customers while making fraud defense even more precise. Several priorities currently in development included:
• Enhancing policy agility so institutions can make critical adjustments in minutes, not days.
• Introducing more nuanced step-up methods—such as document verification and device checks—to add layers of protection without creating blanket roadblocks.
• Enabling dynamic entitlements that adjust account access in real time, based on risk signals.
While 93% of financial institutions believe machine learning and generative AI will play a significant role in the future of fraud detection, the roadmap is designed to harness those capabilities in practical, customer-friendly ways.
The Final Word
Financial institutions don’t have to choose between protecting customers and creating seamless digital experiences. With Q2 and Alloy, they can do both. By combining powerful data, flexible workflows, and a commitment to constant evolution, the partnership equips FIs to stay ahead of fraud while giving customers the confidence and freedom they expect from modern digital banking.