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The Signicat Blog
Katre Kuusik

Content Manager

AI Fraud Is on the Rise: Are Businesses Ready to Keep Up?

AI is reshaping how we live, work, and interact with the digital world. But while businesses are eagerly adopting this powerful technology, fraudsters are also using it to launch more sophisticated and dangerous attacks. From highly convincing deepfakes to advanced phishing scams, AI fraud is on the rise, posing significant risks to companies. Yet, despite these growing threats, only 22% of organisations have started implementing AI fraud defences, leaving the majority critically exposed.

The Escalating Threat of AI Fraud 

Fraud isn’t a new problem, but AI has elevated it to a whole new level—making it faster, smarter, and harder to detect. Insights from Signicat’s report The Battle Against AI-Driven Identity Fraud paint a concerning picture: 

  • Total fraud attempts grew by 80% over three years. 
  • Identity fraud surged 74% within the same timeframe. 
  • Deepfake-related fraud, once rare, now accounts for 6.5% of cases—a 2137% increase

These numbers are alarming. Fraud isn’t just happening more often; it’s getting harder to spot. Fraudsters can now create highly realistic fake identities, manipulate videos, and trick even the most cautious employees with minimal effort. 

For businesses, this means higher stakes—not just financial losses, but also regulatory and reputational damage, especially with stricter regulations like the upcoming PSD3. 

Why Are Businesses Falling Behind? 

Despite growing awareness of AI fraud, many businesses remain slow to act. Here’s why:

  • Limited Understanding: Although 73% of decision-makers recognise AI as a key driver of identity fraud, a detailed grasp of specific tactics—such as deepfake impersonation, voice cloning, and AI-enabled phishing—is lacking. Without this understanding, businesses find it difficult to put effective defences in place. 
     
  • Lack of Expertise: The rapid pace at which AI fraud evolves makes it challenging for even experienced professionals to stay ahead. Many companies lack in-house expertise and must rely on external specialists, which can be costly and difficult to access. 
     
  • Tight Budgets: Investing in advanced fraud prevention tools can sometimes feel out of reach. When budgets are tight, fraud prevention often takes a back seat to daily operations. 
     
  • Competing Priorities: With so many operational demands, fraud prevention doesn’t always receive the attention it deserves. However, delaying action only increases the potential for major losses. 

Steps Businesses Can Take Now 

The good news is that building strong defences doesn’t have to be overwhelming. Here’s how you can get started: 

  • Upgrade Fraud Detection Systems: Fraudsters are using AI to launch smarter and harder-to-detect attacks, so businesses need to fight back with equally smart defences. Start by investing in AI-powered detection tools that can quickly spot unusual patterns and flag suspicious activity with fewer false alarms.  
     
  • Use a Multi-Layered Approach: No single solution is foolproof. Strengthen your defences by combining different methods, such as automated identity verification, ongoing monitoring, biometric authentication and data verification.The more layers, the harder it is for fraudsters to succeed. 
     
  • Train Your People: Employees are your first line of defence. Train them regularly to spot common scams—like phishing emails, fake requests, and deepfake impersonations. Make sure they stay up to date on the latest fraud tactics and know how to act if something seems suspicious. An alert team can stop many threats before they escalate. 
     
  • Take It Step by Step: Start with high-priority areas like onboarding or identity verification. Once these areas are secure, gradually expand your efforts to cover additional systems and processes. By taking it step by step, you can build a solid, lasting defence without overcomplicating things. 

Why It’s Essential to Act Now  

AI fraud is no longer an isolated threat; it’s evolving alongside your business. AI has opened up possibilities for fraudsters to scale high-effort attacks, blending volume with sophistication. The ability to create convincing fake personas or mimic human interactions in real-time can compromise even the most secure systems.  

Fraud prevention is more than a necessity; it’s a competitive edge. When customers know you value their security, they feel safe entrusting you with their information. That trust becomes not only a defence against fraud but also an advantage in today’s competitive market. Businesses that act swiftly will be better positioned to defend against emerging threats and build lasting trust with their customers.