AI Is Supercharging Cyber Fraud How Businesses Can Respond

Cybersecurity risks are evolving at an unprecedented pace, largely because bad actors are now using widely available artificial intelligence (AI) tools for their malicious activities. In this escalating fraud landscape, it is crucial for companies to stay aware of emerging risks and adapt their cybersecurity and anti-fraud practices to keep up.

The financial stakes are incredibly high. The FBI's 2025 Internet Crime Report estimated losses from internet crime surpassed $16 billion in 2023. For individual organizations, the consequences can be devastating, with the average total cost of a data breach in the U.S. reaching an estimated $9.36 million. While major incidents involving the theft of millions of customer records make headlines, criminals continue to exploit employees through common methods like phishing and using stolen credentials. The difference now is that AI enables these bad actors to identify more targets and execute their attacks much faster.

How AI Empowers Modern Scammers

The fraud landscape is transforming rapidly due to technological advancements. What was once basic data theft has become highly orchestrated, targeted deception. Financially motivated actors use phishing, ransomware, and other cyber-enabled scams. Businesses that recognize this shift can proactively strengthen their defenses against these increasingly intelligent threats.

• Generating Cybersecurity Threats: Cybercriminals are using AI tools at various stages of an attack, from scanning for potential targets and creating malware to conducting vulnerability research.
• Creating Fraudulent Identities: Many fraud schemes depend on convincing a victim of the perpetrator's authenticity. According to a FinCEN alert, fraudsters are using AI to bypass identity verification. They can alter or generate images for fake identification documents to get past know-your-customer protocols, leading to check, loan, and credit card fraud.
• Enabling Remote Worker Fraud: AI has even been used in fraudulent work schemes, including an organized effort linked to North Korea that we previously covered this year. In these cases, criminals used AI to create more convincing false identity documents.

Building a Resilient Defense Against AI-Driven Fraud

Cybersecurity is not just an IT issue, and financial fraud isn't solely a problem for the loss-prevention team. Mitigating fraud is a core part of an organization's operational resilience. As fraud tactics become more sophisticated, businesses must evaluate their vulnerabilities and implement layered security measures. Here are some best practices to consider:

1. Prioritize Cyber Hygiene: Foundational cybersecurity practices are a critical defense. CISA highlights the importance of timely software updates, strong and unique passwords, and multi-factor authentication. As NIST has noted, because AI helps bad actors create new schemes, organizations must adapt their defenses, such as by expanding training to cover AI-enabled social engineering.

2. Minimize Your Data to Minimize Risk: Data minimization is key to protecting data from sophisticated fraud. Hoarding unnecessary data increases the attack surface, creating a tempting target for criminals. By implementing sensible data minimization and retention policies, organizations can reduce this surface and mitigate financial and legal risks.

3. Foster Cross-Disciplinary Collaboration: Organizations should encourage collaboration between cybersecurity, fraud prevention, and finance teams. While legislation like the Cybersecurity Information Sharing Act of 2015 promoted sharing technical data, some commentators argue it was too limited and have called for broader information exchange. Internally, companies can formalize collaboration between these teams to share threat information effectively.

4. Scrutinize Financial Processes: Cybercriminals often trick victims into transferring funds to fraudulent accounts. This makes procurement, financial, and accounting teams the first line of defense. Companies should review payment authentication and verification procedures, especially for changes in payment details, to mitigate these risks.

AI-driven fraud is advancing too quickly for complacency. Organizations need proactive, holistic strategies to safeguard their assets and customers. The cost of inaction is steep, as those who fail to adapt risk becoming the next victims of these intelligent, adaptive threats. Be sure to follow our ongoing Fraud and Scam Prevention Series for more insights.