Fraud has long been a thorn in the side of businesses. However, today, cybercriminals are using ever-more sophisticated techniques to steal information, attempt account takeovers, and wreak multiple other forms of havoc. In the UK alone, fraud cost businesses £1.17 billion in 2024, and this figure is set to rise significantly throughout 2025 and beyond. And it’s not just revenue on the line. Fraud can seriously dent brand trust, result in a hefty fine from regulators, and suggest to partners that your business doesn’t take data governance seriously.
To mitigate against the potential damage, an effective fraud protection solution that leverages AI is crucial. These tools can give you the peace of mind that your business – and your customers’ sensitive information – is protected from even newly emerging forms of fraud.
What is an AI fraud prevention solution?
A great AI-fuelled fraud prevention solution detects, prevents, and mitigates a range of online fraudulent activities, such as identity theft, payment fraud, and account takeover attacks. These solutions use artificial intelligence and machine learning capabilities along with behavioral analytics to defend against increasingly sophisticated tactics.
If your business incorporates any element of e-commerce or operates within a sector such as healthcare, finance, or travel, an AI fraud prevention solution is no longer an option, but a must.
Different types of fraud businesses must defend against
There is a plethora of types of fraud, with more categories continuously emerging as scammers come up with new ways to breach organizations’ digital defenses. To choose the best fraud protection software, it’s important to first get a handle on these different varieties.
1. Identity theft
Identity theft is a common type of fraud that involves the unauthorized use of information by fraudsters to perpetrate an attack, such as account takeover or new account fraud. Account takeover is when a scammer accesses a genuine user’s account with credentials they’ve harvested via phishing emails or data breaches to make unauthorized transactions. New account fraud occurs when stolen identities are used to open and exploit brand-new accounts.
2. Online shopping fraud
This type of fraud is when scammers trick consumers into making purchases on fake websites or divulging their personal information. Common techniques, such as social media impersonation or phishing emails, are deployed to convince customers to visit fake websites to buy counterfeit products.
3. Credit card fraud
Another of the most common types of fraud, credit card fraud, involves the unauthorized use of credit (or other type of payment) card information to make withdrawals or purchases from the genuine owner’s account.
4. Investment fraud
Investment fraud often targets new or inexperienced investors, and includes Ponzi schemes and pump-and-dump scams. Clever marketing tactics are often used to persuade investors to part with their cash, usually with promises of a high return on their initial investment.
5. Dating and romance fraud
A particularly cruel type of fraud that’s been on the rise in recent years, dating and romance scams involve fraudsters creating fake profiles on social media platforms and dating sites, typically using stolen photos and fabricated stories to make them appear authentic. Once they have established a connection with their victim, they’ll typically ask for money, maybe citing a medical emergency, or asking for travel funds.
6. Synthetic identity fraud
Another form of fraud that’s exploding at the moment is synthetic identity fraud, which is when a fraudster uses a combination of fake and real information to create a new identity. This could mean, for example, using a fake name alongside a real Social Security number. Synthetic identity fraud is very difficult to detect, as the identity doesn’t correlate with a real person.
Why do all businesses need an AI-powered fraud protection solution?
A fraud protection solution powered by AI is vital for all businesses to comply with robust data privacy regulations, protect customer data, and avoid significant financial losses. The best solutions detect and stop attacks in their tracks, before any damage can be done, identifying and mitigating suspicious behavior in real time. As well as helping to prevent costly customer chargebacks, having effective fraud defenses in place shows your business is committed to proper data governance and builds trust and customer loyalty.
By making the most of high-quality, advanced fraud protection software, your organization can also enjoy a reduction in the operational costs associated with incident resolution, customer reimbursement, and fraud investigation. Fewer customer disputes are just one of the many benefits of fraud protection solutions, which should be part of your overall business cybersecurity strategy.
What to look for in an AI fraud protection service?
- Comprehensive monitoring of user activity to track all user interactions and transactions. Such an overarching view makes it easier to identify the sort of behavior patterns that could indicate fraud, such as login attempts made at unusual times or from unexpected locations.
- Real-time detection is vital to spot and stop fraud from occurring. Advanced, AI-powered algorithms instantly monitor transactions as they happen, and flag suspicious activity to minimize impact and prevent an attack from escalating.
- Dynamic risk scoring assesses transaction risk, taking into account various factors such as location and the value of the order. By flagging higher-risk transactions for review, businesses can address the most serious threats first and optimize their risk assessment processes.
- Behavioral biometrics look at user behavior, like mouse movements and typing speed, to detect anomalies. This method can detect fraud even when legitimate login credentials are used, as fraudsters find it extremely difficult to mimic authentic behavior patterns.
- Adaptive authentication uses transaction risk to adjust security measures as necessary. For example, high-risk transactions may trigger a multi-factor authentication challenge, while low-risk transactions could only require a password.
Top 8 AI-powered fraud prevention solutions in 2025
1. DataDome
DataDome offers AI-powered, multi-layered protection from a comprehensive range of fraud types, blocking malicious intent in real time. This solution deploys thousands of AI models, spanning all industries and companies, and boasts a response time of under two minutes. Plus, DataDome’s exceptionally low false-positive rate means you get first-class fraud defense without your users’ experience being negatively affected.
2. Riskified
Deploying machine learning and AI processes, Riskified is designed to stop online fraud in its tracks. By analyzing hundreds of data points per transaction, the software leverages advanced behavioral analytics and cross-merchant insight to boost approval rates and minimize fraud. It also offers actionable sales and customer behavior data.
3. Kount
Kount uses its machine learning capabilities and vast data network to provide real-time fraud protection across the entire online customer journey. The solution analyzes billions of interactions to assess fraud risk, build trust, and defend against, for example, account takeover attempts and bot attacks.
4. Memcyco
Memcyco offers real-time visibility and control over digital impersonation fraud, alerting businesses if their website is cloned to enable an immediate response. The platform offers a wide range of behavioral analytics, which enables better tracking of affected customers and fraudsters’ devices.
5. Forter
Forter helps businesses fight fraud in real-time, win more disputes, secure their accounts, and even boost conversion rates. The solution analyzes device data, network intelligence, and user behavior across its global network to defend your business from a variety of fraud threats.
6. NICE
This fraud protection solution detects and prevents money laundering, market abuse, and fraud in real time, and uses risk scoring and behavioral analytics to enable dynamic, accurate assessments. NICE’s cloud-native infrastructure makes it easy to scale, and it also offers modules for trade surveillance.
7. ArkOwl
ArkOwl specializes in telephone number and email verification to protect against new account fraud and account takeover. The software helps businesses assess risk by providing insights such as social media presence, creation date, and associated domains, without adding friction to the user experience.
8. Signifyd
Signifyd analyzes transaction data using its extensive merchant network to protect against fraud and help with payment optimization. The solution aims to reduce the manual review burden and increase approval rates by preventing account takeover attacks and tackling false declines and policy abuse. Signifyd supports major payment gateways and integrates with a wide range of platforms.
AI-powered fraud protection services to keep you one step ahead of scammers
No business is safe from fraud, and protecting against it is no longer an option, but vital for organisations, no matter their size or the industry in which they operate. Companies need to choose a solution that doesn’t just protect them now, but is capable of evolving to defend them against new threats as they emerge. Use our guide to identify the very best fraud protection service for your business, to keep your customer details and revenue safe.
