AP fraud strategy is rapidly transferred – Can AI help teams catch up?

Fraud continues to pose a significant challenge to the Accounts Payable (AP) team. Research shows that 68% of organizations encountered at least one fraud attempt in 2024, with AP fraud taking various forms, including phishing attacks, account takeovers and invoice fraud. In addition, fraudsters are growing rapidly with the help of artificial intelligence (AI). In recent years, deep strikes and imitations generated by AI have become the biggest threat, with nearly two-thirds of companies saying that generated AI (Genai) makes fraud more dangerous than ever.

In these attacks, the manual tools and defenses of traditional APs, while still held by most companies, proved to be insufficient. However, when it comes to fraud, AI is a double-edged sword. As bad actors increasingly use the technology to achieve fraudulent goals, the AP department is using its own AI-powered tools to fight back. AI-driven fraud detection and automation systems reduce human errors, improve security, ensure regulatory compliance and provide better visibility and control. These systems make it more likely than ever to be fraudulent wherever and in any form.

A growing threat: AI-generated fraud

Fraud is a constant battle between the AP department, but Genai has introduced technologies such as deep litigation and imitation, making fraud even more dangerous.

Genai has revolutionized fraud technology and risks.

A basic software study confirmed that 62% of CFOs view Genai as a major contributor to the increase in AP fraud. Another 34% say keeping up with these evolving technologies is a major challenge for the AP sector, especially for companies relying on manual fraud prevention processes.

As a direct result, the financial impact of fraud reached unprecedented levels last year.

Trustpair Research found that 86% of U.S. companies targeted with fraud in 2024 lost money. Nearly half (47%) lost more than $10 million. Because of the automation of fraud vectors, it is possible for fraudsters to make more money faster than ever before.

While 90% of U.S. executives say they are confident in the ability of AP teams to detect fraudulent attacks, the increase in the number of successful attempts suggests that confidence may be unguaranteed. For example, an important reason for fraud detection failure is the ongoing reliance on the manual approach to this process.

Insufficient manual fraud detection

Despite the current advanced cybersecurity technology, most AP departments still rely on manual anti-fraud procedures, which invalidates fraud detection and prevention.

Most AP departments still rely on manual methods for fraud detection.

Experts point out that while manual fraud comments and reviews are useful for finding suspicious findings, they leave a big gap, during which fraud activities can draw attention, especially as transaction volumes increase and fraud strategies increase.

Human error is the most common source of payment fraud.

In fact, manual processes are the number one factor in fraud, and the bigger the business, the better it will be. Trustmi reports that more than one in five companies are particularly vulnerable to payment fraud alone due to their high monthly invoice volumes. This is because a large amount of manual processing has contributed significantly to human error, i.e. the largest source of single payment fraud, at 50%.

The massive scale and complexity of financial transactions within large organizations makes it nearly impossible for human reviewers to detect fraud in a timely manner or avoid slips and negligence. Complex tasks such as invoice matching, approval tracking and identification of duplicate payments are becoming increasingly difficult to manage accurately. Without real-time monitoring, unusual spending patterns or fraudulent activity can last for weeks or even months, potentially leading to serious financial losses.

Fight with Fire: AI-driven anti-fraud strategies

As fraudsters adopt advanced technology, AP departments must also deploy new approaches. Automation and AI are key weapons in the fight against new forms of cybercrime.

AP automation can significantly improve security.

However, full automation of the payment process is still limited, but only 5% of organizations fully automate their AP systems. However, 69% of people have passed partial automation, which is a key step in preventing fraud. This growing trend reflects the shift toward a digital transformation of financial operations due to the need to improve efficiency, accuracy and security in managing payments.

AI agents have been proven to be effective in detecting fraud and human error.

AI-driven fraud detection systems can detect invoice abnormalities, duplicate invoices and data entry errors that humans often miss. An example of AI anti-fraud integration is Rautable's merger of AI agents into its AP automation platform. Initially, the platform’s optical feature recognition (OCR) system scans invoices to create bills that automatically match purchase orders, or predictively encoded based on machine learning (ML) and historical data. The AI ​​proxy then scans for exceptions and errors, and if anything is found in question, remind the AP team to stop the fraud before it occurs.

“As fraudsters become increasingly creative, it becomes impossible for humans to keep up,” Omri Mor, CEO and co-founder of Routable, said in a press release.[This solution] Utilize the power of AI to detect and prevent invoice fraud and human errors – provide AP teams with superhuman visibility to protect business. ”

Transform from manuals to automatic fraud prevention

Due to the reliance on human supervision and susceptibility to errors, manual fraud prevention methods are increasingly insufficient. Manual screening often fails to capture complex fraud schemes, such as those produced by Genai, because it is difficult for individuals to spot subtle anomalies in large numbers of transactions. Furthermore, manual processes lack real-time monitoring and consistent controls for efforts to execute, both of which create opportunities for fraudsters to exploit weaknesses in the AP system.

Automated and AI-powered solutions provide a more efficient way to fraud detection and prevent accounts payable. Automation systems centralize all AP activities, perform responsibilities and provide real-time monitoring, making unauthorized transactions more difficult. AI can analyze large amounts of transaction data, identify patterns and flag exceptions, which are difficult to detect manually. These technologies also create a comprehensive audit trail that simplifies the approval workflow and reduces the risk of human error. By leveraging automation and AI, AP departments can increase visibility, faster detection and stronger control, making their accounting processes safer to prevent fraud.