This is the first edition of our weekly update on what’s breaking (and fixing) modern lending. You’re getting this because we thought it might be useful to your work in the lending space. If it’s not for you, you can unsubscribe anytime at the bottom of this email.

Three insights. Three minutes. Zero fluff. 

Synthetic Fraud: The $250K Reality Check

Synthetic fraud now accounts for most identity fraud losses — and it’s accelerating. Deloitte calls it the fastest-growing financial crime in the U.S., with $5B in projected 2025 losses.

It’s no longer just targeting consumers. One Wisconsin lender recently lost $250,000 to a fake business. The “owner” passed a live verification call, submitted incorporation documents, and perfect P&Ls — all fabricated using public records and AI.

👻 The scary part? Every standard check was passed. Fraudsters aren’t guessing anymore — they’re impersonating with precision.

🚨 The real problem? Most fraud systems trigger after submission, not at intake.

⚡ Action step: Layer your defenses. No single check catches everything. But combining document analysis, digital footprinting, and behavioral signals makes synthetic fraud exponentially harder to pull off.

Behavioral Insight: Why Borrowers Quit in 3 Seconds

We've spoken with 50+ lending experts across credit unions, community banks, and CDFIs.

The top challenge? Not bad borrowers. Not competition. It's drop-off during document upload. One CDFI told us their average document collection takes 20-25 days. But 30% of applicants never even start uploading — they see the checklist and vanish.

💡 The psychology? Borrowers make a split-second judgment: Is this going to be a hassle? If yes, they're gone. They won't tell you it's too complicated — they'll just disappear.

🚨 The real problem? Borrowers expect instant feedback like they get everywhere else online — not 3-day email rounds.

⚡ Action step: Audit your upload process as if you're a busy business owner at 11pm. Count the clicks. Time the wait. If it takes more than 3 minutes to understand what's needed, you're losing loans to friction.

🔍 Want to go deeper? Watch Kristen Berman's brilliant TED Talk on why watching user behavior beats asking for feedback. 15 minutes that might change how you think about drop-offs.

Fintech Watch: The AI Expectations Gap

According to Stripe's 2025 report, 78% of businesses say AI is improving both customer experience and profitability. Instant decisions and smart retries are now table stakes in payments.

Your borrowers use Venmo daily. Get instant credit from Square. Then they hit your loan application — and wait 20 days.

🚨 The problem? Borrowers don't compare you to other banks. They compare you to their last great digital experience — and that bar rises daily.

⚡ Action step: Pick one piece of your lending workflow. Ask: "How would Square do this?" Start there.

🔍 Read the full Stripe report

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Warmly,
Sandra Wasicek
Founder & CEO, ZorroFi