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Over a third of companies say they are using AI, including generative AI, to fight fraud, according to Experian. As fraud threats become more complex, companies are accelerating their investments with over half adopting new analytics and building AI models to enhance customer decision-making.
The AI paradox
AI is playing a double role in the fight against fraud. It’s helping businesses detect threats faster, but it’s also fueling new scams like deepfakes and impersonation.
Agentic AI, which can make decisions on its own, brings more efficiency to fraud detection and customer service. But it also opens the door to more advanced, automated scams. As these tools become more widely available, the risk of misuse grows. Companies must build in strong safeguards and oversight from the start.
The report points to rising concerns about AI-driven fraud and deepfakes, with 72% of business leaders expecting them to become major issues by 2026. While some companies are open to using AI to fight fraud, consumer trust is still low. Fewer than one in four people say they’ve used AI tools like chatbots, and only 18% fully trust them.
“With the widespread use of generative AI, fraud is evolving faster than many businesses can keep up with,” said Kathleen Peters, Chief Innovation Officer, Experian North America. “As a trusted partner to organizations across diverse industries, we take a proactive approach to fraud prevention — combining data, advanced analytics and innovative technology to address both emerging and future threats. We’re committed to ensuring the delivery of seamless user experiences while fostering trust at every interaction.”
Identity theft and online scams top growing list of fraud threats
This year’s data shows businesses are feeling the pressure, 90% say they’re worried about fraud, and 70% are increasing their budgets to fight it. Nearly 60% of companies reported higher fraud losses compared to last year. The most common types include identity theft, payment fraud, account takeovers, peer-to-peer payment scams, and first-party fraud.
At the same time, 57% of consumers remain uneasy about doing things online. Few believe companies explain how their data is used, and even fewer feel secure when using a new brand. Their top concerns are identity theft, stolen credit card information, online privacy, phishing scams, and misinformation. According to the FTC, consumers lost a record $12.5 billion to fraud in 2024, a 25% jump from the year before.
Companies stick to passwords while users prefer biometrics
As a result of these concerns, customers are raising their expectations for businesses when it comes to keeping them safe online. Over 80% expect companies to act on security or privacy concerns, and half want stronger online safeguards. While 85% of businesses believe their fraud controls align with consumer expectations, less than half of people are highly trusting of companies to address their concerns online.
At the same time, businesses are still relying on verification methods like passwords and PINs, while more secure methods that people say make them feel safest, like biometrics and behavioral analytics, remain underused. This disconnect highlights the need for organizations to not only invest in innovative fraud prevention methods that meet consumers’ expectations but also communicate consistently so their customers can feel more secure and confident.
