Online fraud is a serious headache for businesses and individuals nationwide. According to the US Fraud Industry Pulse Survey 2025, a recent spike in online fraud saw 72% of respondents reporting a rise in digital attacks over the last year, with a significant gap between how protected businesses think they are and how protected they actually are. Not only this, but most companies are concerned that the threat level is set to increase even further over the coming twelve months.
New AI tools, however, are powering the fightback and making it tougher for scammers to harvest sensitive, vital data. If you’re not on board yet, deploying these could be the single best thing you do for your business this year.
The Threats
There are many forms of online fraud, and all are potentially catastrophic. Some of the most common types of digital fraud include impersonation fraud, document fraud, account takeover, and ‘adversary in the middle’ fraud. The latter involves cyberattackers intercepting communications to steal information, manipulate data, or gain unauthorized access. Multi-accounting fraud is also growing, with online scammers creating many different accounts to exploit bonuses or promotions. This form of fraud experienced a 10% increase from 2023 to 2024.
While this list may be a formidable one, AI can help tackle all these threats – as well as ones that haven’t even yet appeared on the scene.
Beyond Human Capabilities
AI’s superpower is its ability to analyze, in real-time, truly vast amounts of data in a way and at a speed that humans cannot. Rather than be guided solely by predefined patterns, AI assesses historical data, while machine learning models develop their capabilities by looking at millions of past transactions. This makes AI a powerful tool to detect suspicious online activities and take the necessary steps should a threat occur to contain and eliminate it.
The Next Level of AI: Generative AI
Generative AI may be used by cybercriminals to commit fraud, but the tables have turned. Today, generative AI is used in fraud detection to discover anomalies, making it much easier to identify patterns of behavior that could indicate online fraud. From here, AI-fuelled defence systems can spring into action, able to stay ahead of even newly evolving threats by continuously learning and adapting.
These generative AI tools can create highly realistic synthetic datasets to train fraud detection models, meaning they’ll be able to spot even rare patterns of fraud. By proactively addressing potential fraud threats, generative AI enhances overall security, reduces financial losses, and helps keep an organization’s invaluable reputation intact.
Generative AI is enhancing biometric authentication measures, too, and can ensure that, for example, video submissions and identity documents are from real people rather than bots and deep fakes.
The Future
As online fraud and other digital threats continue to proliferate, the need for ever more advanced AI tools to combat them will increase. For individuals and businesses, having the very best protection in place is vital – this means deploying multi-layered AI tools able to continually adapt to new threats to stay one step ahead of cybercriminals.
