Fraud in Business: How AI is changing fraud
Artificial intelligence is making some types of fraud faster, more convincing and harder to detect. Fraudsters can use it to create realistic identities, emails, invoices, images, videos and voice recordings, allowing them to impersonate trusted individuals and target businesses at greater scale.
This does not mean businesses are powerless. By understanding how criminals may use AI and reviewing existing controls, organisations can reduce their exposure and respond more effectively to suspicious activity. This article looks at the main AI-related fraud risks and the practical steps businesses can take to protect themselves.
1. Fake Identities
Fraudsters can now use AI to create convincing fake identities by mixing real personal details with completely made-up ones, making it very difficult to identify who or what is real.
What you can do:
- Strengthen your identity checks when bringing on new suppliers, onboarding customers, or hiring employees. Where possible meet the person face to face or speak to them
2. Deepfake audio or video
Fraudsters can use AI to create fake videos, images, or voice recordings that look or sound like a real person.
What you can do:
- Agree clear procedures within your team for verifying unusual requests, for example speak to the person who is purportedly making the request to confirm that they did indeed make the request
- Encourage a culture where people feel comfortable double-checking anything that seems unusual
- Use approval processes that involve more than one person in the team which allows for double checking
3. AI‑Improved phishing and Impersonation
Most of us have likely been on the receiving end of phishing emails and these are becoming increasingly realistic. AI helps criminals create very convincing phishing emails or messages that appear to come from someone trustworthy.
What you can do:
- If unsure, always double check with the person the email came from. Use an email address you already have (don’t hit reply) or a phone number you have (not the number on the email) to confirm the validity of the email
4. AI‑powered insider threats
Information technology is becoming increasingly easier to use with the help of AI, making it simpler for a disgruntled employees to utilise AI when committing fraud from within the organisation.
What you can do:
- Make sure your IT systems have strong, appropriate access controls, up to date virus protection and that systems allow for segregation of duties so that one employee is not responsible for everything
- Be alert to changes in employee behaviour. This could highlight to you an unhappy employee or whether an employee is personally or financially struggling for example which could provide motivation for a fraud to be committed
5. Manipulating financial information
AI can be used to create fake transactions or misleading financial documents. For example, recording increased sales so that a bonus target is met, improving the balance sheet to gain a much-needed financial injection, or creating fake invoices or expense claims so that an individual receives money they are not entitled to.
What you can do:
- Strengthen controls around accounting entries, forecasting, and financial reporting
- Segregation of duties is important and we would encourage those higher up the organization to be involved in the final approval of transactions and regular review of financial figures such as management accounts
- Ask an expert to review and assess your systems and controls to confirm if this are appropriate to reduce the risk of this fraud type
6. Vendor fraud
Fraudsters may use AI to impersonate real suppliers or to produce very convincing fake invoices or contracts.
What you can do:
- Review how your organisation checks the authenticity of suppliers and invoices. Is this still appropriate to reduce this fraud due to changes in AI. What you had in place two years ago may no longer be sufficient
- As mentioned previously communicate with a new supplier direct for example an in-person meeting or online meeting or through speaking on the phone
- Prior to paying invoices phone up your supplier contact and confirm the bank details match those on the invoice
As always, if you are unsure, it is best to check directly.
7. AI‑enhanced money laundering
Criminals can use AI and digital platforms to move money around in ways that look legitimate, especially through cryptocurrencies.
What you can do:
- Build expertise in tracing digital transactions if your organisation is exposed to crypto risks.
- Review anti‑money‑laundering systems to ensure they can detect AI-driven patterns.
How AI can support fraud prevention
While AI creates new risks, it can also strengthen fraud prevention and detection. When used alongside appropriate controls and effective human oversight, AI tools can analyse large volumes of data, identify unusual patterns and flag activity that may require further investigation.
Businesses may use AI to support:
- Identifying unusual transactions or behaviour more quickly
- Verifying identities, documents, suppliers and payment details
- Detecting deepfakes and other AI-generated content
- Monitoring access and activity that may indicate an insider threat
- Identifying possible manipulation of financial information
- Strengthening cybersecurity monitoring
- Recognising complex or unusual transaction patterns associated with money laundering
AI should support, rather than replace, professional judgement. Any alerts or findings still require careful review, but the technology can help businesses identify risks earlier and focus their attention where it is most needed.
Is your business prepared for AI-related fraud?
Fraud risks are developing quickly, and controls that worked a few years ago may no longer provide the same protection. A focused review can help you identify weaknesses, assess whether your existing processes remain effective and decide where additional safeguards are needed.
Contact Gravita or Jade Quaintance to discuss how we can help you review your financial systems and controls, strengthen fraud prevention and respond to emerging risks.
Similar Insights
Starting a business? Why the right foundations matter from day one
A VAT cut may help hospitality, but it is not a silver bullet
FRS 102 debt modifications: Common accounting pitfalls and what finance teams need to know
Sign up to Gravita's latest updates and newsletters
Stay up-to-date with our event invites, latest news and updates, straight from Gravita's experts.