Banking operations have changed due to technological advancement. On one hand, modernization in technology has facilitated the daily operation of banks; on the other hand, this has also resulted in an increase in the number of cyber-attacks. Artificial Intelligence has introduced new models to detect and prevent cybercrimes. Some fraud has also occurred due to the involvement of employees inside particular organizations. So, this study has focused on both sides: the machine as well as the human. Firstly, the research has focused on fraud diamond theory and has analyzed factors such as rationalization, capabilities, perceived pressure, and perceived opportunities to understand the psychology of the fraudster. Secondly, Artificial Intelligence characteristics, threat exposure, big data management, explainability, cost effectiveness, and risk prediction are evaluated to explore their use in fraud reduction in banks. The research data have been collected from 15 Banks in Pakistan with the help of a questionnaire using five-item Likert scales. The data have been analyzed using IBM SPSS Software. The results gained after correlation and regression analysis proved that Fraud diamond theory and AI characteristics have positive and significant effects on cybercrimes. This study is a great contribution to the banking industry of Pakistan as it provides a complete analysis to control fraud inside organizations by understanding the mindset of fraudsters with the help of fraud diamond theory. At the same time, outside fraud will be handled with the help of Artificial Intelligence. This will result in banks growth, which ultimately boosts the economy of a country.
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