Building risk resilience through better fraud detection

At a time when technology is at the front and centre of all businesses, they are more exposed to cyber-related frauds, ranging from AI-powered social engineering and deepfakes to advanced cross-channel financial scams.

Expanding digital footprint of organisations has widened the scope of fraudulent attacks. In such a scenario, awareness toward such risks needs to be increased. As we know, November saw the Association of Certified Fraud Examiners (ACFE) lead International Fraud Awareness Week, emphasising the urgent need to combat fraud.

According to the CEO Outlook Report, there is an acute awareness about the risk at hand, among CEOs in India, with 75 per cent of them saying that cybercrime can have a major impact on their companies. An overwhelming majority of them have voiced concerns about how identity theft, data privacy breaches and fraud attempts are critical threats, compromising operations, customer relationships and long-term competitiveness.

The more advanced the tech systems, the more sophisticated the fraud risk. As a result, companies are compelled to move on from conventional monitoring frameworks that are largely passive in nature to proactive procedures led by AI. Advanced tools such as real-time monitoring, predictive analytics and enterprise-wide risk integration are more suitable to tackle a relatively unpredictable threat landscape of today.

For 65 per cent of CEOs in India, investing in AI is important to harness its ability of analysing large-scale behavioural patterns, detect anomalies early and respond to threats faster. With the help of AI-powered systems, companies are well placed to track instances such as suspicious transactions, unusual user behaviours, compromised credentials and network intrusions in milliseconds. All this needs to be implemented at an early stage of fraud detection and avoid it from escalating into an organisation-wide breach.

Additionally, business leaders also acknowledge AI’s role in supporting enhanced decision-making, improving data quality and accelerating cyber-attack response. These capabilities allow organisations not only to detect fraud but to build smarter, more anticipatory risk management models.

Though AI is a preferred tool for fraud detection, it is riddled with ethical issues, as noted by 62 per cent of CEOs in India, with 76 per cent of them expressing concerns about the pace of regulation. When companies invest in transparent algorithms, strong data foundations and frameworks that support responsible use, AI-enabled fraud detection become more effective.

Furthermore, lack of talent is a considerable missing link in companies’ fraud resilience building exercise. Business leaders in India are cognizant of the fact that while technology plays a transformative role, human capabilities remain equally important. In the CEO Outlook, 81 per cent of them have admitted that AI adoption requires rethinking skills even for entry-level roles. Consequently, organisational investments on upskilling programmes related to cyber analytics, digital forensics and AI governance has risen considerably.

The need for AI-powered fraud detection system has also intensified the need for reshaping workflows and promoting a culture of cyber awareness across the enterprise.

Operating in one of the fastest-growing digital economies, businesses in India must stay alert, as white-collar crimes are on the rise throughout the corporate sector, and no industry is immune to these risks.

Fraud has a grave impact on business growth as well as long-term stability. When companies adopt AI-enabled fraud detection, it aligns with their larger shift toward resilient, future-ready organisations. But this strategy needs more than technology. It must be an amalgamation of strong governance, high-quality data, adherence to evolving regulations and collaborative ecosystems comprising partnerships with financial institutions, regulators and cybersecurity experts.

In a complex digital world, companies that skilfully integrate fraud detection as a strategic priority with a proactive approach, will lead this fight against risks, safeguarding reputation and building resilience in the long run.

A version of this article was published in The Financial Express CIO.com on December 17 2025. The same can be read here