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How AI Is Changing Fraud: 5 Ways Businesses Can Strengthen Their Fraud Defenses

How AI Is Changing Fraud: 5 Ways Businesses Can Strengthen Their Fraud Defenses

Misturat Alausa Misturat Alausa Fraud prevention 5 min read 29 Aug 2026 43 views

The types of fraud happening today are not limited to stolen credentials, forged documents, or traditional scams. This is because artificial intelligence provides fraudsters with new tools to create convincing identities, manipulate information, automate attacks, and target more people at scale. 

Also, generative AI allows fraudsters to create fraudulent content more quickly and at a lower cost, while technologies such as deepfakes and synthetic identities make it more difficult for businesses to distinguish legitimate customers from fraudsters. What this means is that businesses need to adopt fraud prevention measures that evolve alongside the threat. It is no longer just about asking whether an identity or document is genuine, but also whether the person, behavior, device, transaction, and surrounding risk signals are consistent. 

The Rise of AI-Powered Fraud 

Fraud is becoming easier to create, scale, and adapt as generative AI allows scammers to create convincing documents, impersonate real individuals, build synthetic identities, produce deepfake audio and video, and automate attacks that once required considerable time and resources. This shift is sometimes referred to as the industrialisation of fraud, which simply means that technology allows fraudsters to operate at greater speed and scale. This impact is already being felt across businesses, as seen in a 2025 report by Experian, which found that 73% of fraud leaders believe generative AI has permanently altered the fraud landscape. This indicates that AI is doing more than creating new forms of fraud; it is changing the way fraud itself is carried out, making attacks more sophisticated and harder to detect. 

The effect these AI-driven frauds can have on businesses’ finances can also be substantial as these technologies become more widely available. A 2024 Deloitte report projects that generative AI-enabled fraud losses could skyrocket to $40 billion by 2027. This shows how quickly AI could increase both the scale and financial cost of fraud. Also, many businesses are finding it difficult to keep their fraud defenses up-to-date. Experian’s 2026 research found that 68% of businesses across EMEA and APAC say their current fraud technology cannot keep up with increasingly sophisticated, AI-enabled attacks. This highlights the gap between how quickly fraud can occur and how quickly businesses can detect it. As fraudsters use AI to operate more quickly, businesses need to rethink how they identify risks, make decisions, and strengthen their defences. 

5 Ways to Build Stronger Fraud Defenses 

  1. Move From Point-in-Time Verification to Continuous Risk Assessment: Businesses need to understand the importance of ongoing verification rather than relying on a one-time check during onboarding. This is because a customer may appear legitimate when they first sign up but present different risk signals over time. A stronger approach is to continuously evaluate a customer throughout their lifecycle to determine whether their activity remains consistent with expected behavior. Verification should not stop once an account is created; businesses should continue monitoring relevant customer information, transactions, and changes in behavior throughout the customer relationship. 
  2. Detect Synthetic Identities, Not Just Fake Documents: Fraudulent identities are not always created using completely fake information. With the rise of synthetic identities, fraudsters can combine genuine and fabricated details to create profiles that appear legitimate, making them difficult for businesses to detect through traditional verification processes. As a result, businesses need to look beyond checking whether a document is authentic and also evaluate the broader identity signals connected to the customer, including whether the information provided is consistent and whether the identity’s behaviour matches that of a genuine customer. This broader approach can help businesses identify suspicious identities that may pass basic verification but reveal inconsistencies when other customer information and activity are considered. 
  3. Match Machine-Speed Attacks With Real-Time Decisions: AI allows fraudsters to carry out attacks quickly. As a result, businesses cannot rely on slow, manual processes to detect every potential threat. This is where real-time risk signals and automated decision-making can help, as they enable businesses to assess risk as it happens, allowing legitimate transactions to proceed while potentially risky activity is flagged for further review. The aim is not to remove human involvement entirely but to use automation to direct human attention toward cases that require closer investigation, while routine, lower-risk activity can be handled more efficiently. 
  4. Connect Identity, Compliance, and Fraud Intelligence: A suspicious transaction can be better evaluated when combined with unusual customer behavior, an identity mismatch, device information, or other risk indicators. Businesses need to review different sources of information together rather than relying on a single check. Therefore, integrating identity verification, compliance data, and fraud intelligence can give businesses a more complete view of risk and help them make more informed decisions. 
  5. Build Adaptive Defenses: Fraudsters are constantly coming up with new tactics, which means a control that works today may become less effective when attackers discover how to bypass it. Therefore, businesses need flexible fraud defenses that can adapt to new signals, behaviors, and attack patterns. Combining real-time signals, behavioral intelligence, risk analysis, and regularly updated detection methods can help businesses adjust their defenses as fraud threats evolve. 

The future of fraud prevention is not about adding more checkpoints but about making faster and more efficient risk decisions using the right information. Therefore, businesses need to integrate identity, compliance, and fraud intelligence to identify emerging threats without creating unnecessary friction for legitimate customers. 

Want more insights on fraud prevention? Follow Prembly Insights for practical strategies to help your business stay ahead of evolving fraud threats.