The Rise in AP Fraud: A Global Problem

Basware’s ‘The Rise in AP Fraud’ Report Reveals Alarming Trends

Key Findings

• 62% of businesses cite generative AI as a key driver behind the surge in invoice fraud

• 7 out of 10 organizations were victims of fraud in 2024

• 90% lack experience in fraud prevention teams

• The perfect storm of challenges: new survey identifies company exposure to invoice fraud and lack of protection measures, causing global losses of $485bn

Global Survey Reveals Alarming Trends

According to a new global survey, two-thirds of businesses (62%) cite generative AI as a key driver behind the surge in invoice fraud. This increases difficulty in distinguishing between legitimate and fraudulent documents, as attacks grow in volume and sophistication.

Alongside this issue, 90% of organizations lack dedicated fraud prevention teams, forcing accounting staff to juggle fraud management beside their regular responsibilities, often straining resources and increasing vulnerability.

The Financial Impact

Fraud is a global $485bn issue. In 2024, seven out of 10 organizations (68%) reported fraud attempts, with 62% noting these attempts had worsened over the past year.

The financial impact is staggering. Last year, fraud schemes, including bank fraud, resulted in global losses of $485 billion.

The Perfect Storm of Challenges

Remote work and decentralized operations are seen as key contributors of this surge, as identified by a quarter (25%) of respondents. By weakening internal controls, remote work exposes accounts payable (AP) departments to greater vulnerability, making it harder to prevent fraudulent activities.

At the same time, roughly a quarter of respondents also point to rising transaction volumes (29%) and the expansion of the supplier base (25%) as critical risk factors. With more invoices to process and a larger number of suppliers to manage, AP teams face greater complexity, which increases the likelihood of errors or fraud.

Tools and Tactics

AP departments are on the frontlines of fraud detection, while also managing supplier payments, leaving them overwhelmed by the complexity and growing volume of fraudulent attempts.

Increasingly sophisticated tactics, such as fake invoices, deepfake media, and phishing scams – driven by generative AI – have made attacks more convincing and harder to detect. As a result, two-thirds (62%) of businesses now cite generative AI as a key driver behind the surge in AP fraud.

Combatting Fraud

AP fraud is one of the most targeted types of fraud for businesses. According to the survey, 28% of organizations cite a lack of AP automation to help tackle fraud. Reliance on manual processes and outdated tools leaves businesses ill-equipped to manage complex, high-volume transactions, creating critical gaps for fraudsters to exploit.

One example of how automation has strengthened AP fraud prevention is KION, a global leader in forklift trucks and warehouse equipment, who were previously vulnerable to fraud risks due to manual invoice processing.

Conclusion

The rise in AP fraud is a global problem that requires immediate attention. With generative AI driving the surge in fraudulent activities, businesses must adapt to the changing landscape and implement robust fraud prevention measures to protect their financial interests.

FAQs

Q: What is the main driver behind the surge in invoice fraud?

A: According to the survey, 62% of businesses cite generative AI as a key driver behind the surge in invoice fraud.

Q: How many organizations lack dedicated fraud prevention teams?

A: 90% of organizations lack dedicated fraud prevention teams, forcing accounting staff to juggle fraud management beside their regular responsibilities.

Q: What is the global financial impact of fraud?

A: Fraud schemes, including bank fraud, resulted in global losses of $485 billion last year.

Q: What are the key contributors to the surge in AP fraud?

A: Remote work, decentralized operations, rising transaction volumes, and the expansion of the supplier base are key contributors to the surge in AP fraud.

Q: How can businesses combat AP fraud?

A: Businesses can combat AP fraud by implementing robust fraud prevention measures, including automation, AI, and training for accounting staff.