Over the past year, fraudsters have quickly adapted to the surge in AI and machine learning, making their schemes more complex and widespread than ever. This isn’t just a simple increase in fraud that can be addressed with additional resources or headcount – it’s a revolutionary transformation that forces businesses to reassess their entire risk management approach.
Fraudsters can now leverage AI-powered bots to automate and scale schemes like account takeovers, fake account creations and even synthetic or fake identity generation. Additionally, distinguishing fraud from reality has never been harder. Deepfakes – AI-generated videos, images, or audio – are now being used to impersonate real people and bypass authentication systems at major companies – even the most experienced individuals can’t tell the difference.
A finance employee at a large multinational firm once authorized a $25 million payment after a video call with what turned out to be a deepfake CFO.
Fraudsters are only getting smarter, and their tools are advancing rapidly. If businesses don’t stay ahead of these evolving threats, the gap between fraudsters’ capabilities and their defense systems will keep widening, putting organizations at risk of financial loss, reputational damage, and legal repercussions. Businesses need to move beyond reactive measures and adopt efficient, proactive solutions to stay ahead.
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Key projections for the 2025 risk landscape
The 2025 risk landscape will be shaped by three key developments:
- The rise of AI will increase the complexity and scale of fraud schemes
- The growth of Fraud as a Service (FaaS) will lead to a higher volume of attacks
- Regulatory changes will shift the burden of responsibility to businesses
These factors will put significant pressures on businesses to adopt robust solutions that can keep up with the complexity and scale of modern fraud tactics while meeting regulatory requirements to protect users. To address these challenges, businesses will need more proactive solutions, like advanced geolocation, to stay ahead of evolving risks and comply with evolving regulations.
The rise of AI will increase the complexity and scale of fraud schemes
As we predicted in 2024, AI and machine learning powered a surge in fraud attacks, including the high-profile Elon Musk deepfake scam that drained $690,000 from someone’s retirement fund, along with thousands of dollars from other individuals. These incidents show that AI will continue to make fraud schemes more agile, personalized, and hard to detect.
Fraudsters can leverage AI and Machine learning to personalize attacks by analyzing large data sets to pinpoint vulnerabilities and tailor attacks for specific targets. For instance, AI-generated videos, images, or audio can be used to impersonate real users, bypass advanced authentication systems, or pose as someone close to a target to build trust. Fraudsters may also simulate attacks to find weak points in systems or analyze stolen data to identify vulnerable targets. They can even mimic “legitimate” behaviours, allowing fraudsters to bypass defences without triggering alerts.
Beyond personalization, AI and machine learning can amplify the scale and volume of attacks. AI-powered bots can automate schemes like identity theft and account takeovers. These tools can also speed up tasks, like sending thousands of text messages to targets simultaneously. Furthermore, the widespread availability of sophisticated AI tools makes it easier for fraudsters to collaborate and distribute their knowledge on a global scale.
The growth of Fraud as a Service will lead to a higher volume of attacks
The growing availability of sophisticated fraud techniques is making it easier for individuals with limited technical skills to access “pre-packaged” fraud tools, stolen data, instructional manuals, and even personalized coaching from experienced cybercriminals. FaaS lowers the barrier to entry for aspiring fraudsters, enabling them to carry out attacks like account takeovers and identity theft with less effort.
As fraud tools become more accessible, the sheer volume of attacks will rise, overwhelming businesses that rely on their existing resources to manage fraud. Even amateur fraudsters can now execute complex, realistic schemes, making it harder for businesses to keep up. The surge in fraud will force companies to prioritize only a certain number of attacks, leading to inevitable losses from overlooked cases.
Allowing fraudsters to operate on platforms risks more than just financial losses. It can damage trust with customers, expose businesses to legal consequences for insufficient protection, and drain the morale of risk management teams. With limited time and resources, businesses need tools that streamline fraud detection with high accuracy. Proactive prevention and precise detection are key to stopping attacks before they happen, saving time and resources by avoiding unnecessary evaluations.
Regulatory changes will shift the burden of responsibility to businesses
The global regulatory landscape for fraud is changing quickly, and we can expect this trend to continue in 2025, with businesses being held more accountable for protecting their users.
The Financial Action Task Force (FATF) has set international standards for anti-money laundering (AML) and Combating the Financing of Terrorism (CFT), requiring businesses to implement programs and procedures that ensure the integrity of their platforms and prevent criminal activity.
In many countries, such as Canada and the U.S., businesses face serious legal and regulatory consequences for non-compliance, including fines and criminal charges.
Certain industries, such as financial services and healthcare, are also seeing stricter regulations. For instance, the NIS2 (EU) directive mandates enhanced cybersecurity and risk management standards in 18 critical sectors, including banking, digital services, and financial markets. Failure to comply with NIS2 can result in hefty fines – ranging from 7 to 10 million euros or 1.4 to 2% of annual global revenue – whichever is higher. Additionally, top executives can be held personally liable for gross negligence.
These regulatory changes emphasize the increasing accountability businesses face and drive the need for advanced prevention and detection technologies. To stay ahead, businesses must proactively invest in advanced risk management solutions and stay informed about the latest regulatory requirements.
What to look for in risk management solutions
Fraud isn’t what it used to be; simply adding more resources or staff won’t cut it anymore. Today, the best solutions aren’t reactive—they’re proactive, precise, and smart enough to keep up with the scale and complexity of modern risks.
Unlike traditional fraud prevention tools that rely on outdated methods, advanced geolocation gives you the capability to outsmart fraudsters. Its exceptional ability to detect anomalies and patterns allows it to identify fraud before it happens, keeping digital platforms secure without adding friction for users.
A robust risk management solution designed to adapt to future challenges will offer these key benefits:
- Increased accuracy and precision for faster, smarter fraud detection
- The ability to tackle evolving threats before they occur
- A better user experience with stronger security and less friction
- Streamlined operations that boost efficiency and profitability
Integrating advanced geolocation into risk management strategies will help businesses reduce fraud rates, improve customer trust, deter bad actors and boost their bottom line.
Increased accuracy and precision for faster, smarter fraud detection
Fraud is getting harder to catch, and the pressure on fraud and risk teams will only increase. With limited resources, every minute spent chasing false positives means less time to focus on actual threats. To stay ahead, businesses need to be confident that their fraud detection tools are accurate. The more accurate your data is, the faster risk management teams can make decisions to stop fraud in its tracks.
That’s where advanced geolocation comes in. It offers highly accurate, tamper-proof data that significantly reduces false positives, allowing risk management teams to focus on the fraud that matters. Unlike traditional methods that rely on IP addresses – which can be easily spoofed or inaccurate by over 100 miles – advanced geolocation combines multiple data sources, such as WiFi, GPS, GSM, and IP. This approach makes it much harder for fraudsters to fake their location, offering more accurate, robust data.
The industry standard for geolocation – which relies on IP addresses – is easy to spoof and can be inaccurate by over 100 miles.
The ability to tackle evolving threats before they occur
By combining real-time detection, machine learning, and historical data, advanced geolocation helps businesses proactively prevent threats in real time before they cause damage. The system learns from past and current fraud attempts, identifying patterns and anomalies that signal suspicious activity.
For instance, if a user tries to access their account from a device with a different GSM signal than usual and an IP address linked to fraud, the system will instantly flag it as a potential threat and prevent unauthorized access. Not only does this reduce financial losses to fraud, but it also helps protect your organization’s reputation and the trust of your users.
Advanced geolocation also offers features like geofencing and transaction blocking, which can stop repeat offenders from accessing a platform. As fraudsters increasingly rely on automated attacks and bots, being able to block specific locations or accounts is key to cutting down on fraudulent transactions. This reduces unnecessary work for your fraud and risk teams and allows them to focus on more pressing threats.
A better user experience with stronger security and less friction
For too long, businesses had to choose between strong security and a smooth user experience. With advanced geolocation, you don’t have to pick – this technology lets you strengthen your defences while still offering a personalized, seamless experience for trusted users. By analyzing both real-time and historical data, including location and device signals, advanced geolocation helps you spot the difference between legitimate and fraudulent users. This means businesses can add extra security measures for high-risk users while creating a frictionless experience for low-risk users.
For example, low-risk users tend to have consistent data across multiple signals (location, device, behaviour), making their interactions predictable. These users can enjoy smooth onboarding, fast logins, and easy transactions – leading to higher customer satisfaction and lower drop-off rates. On the other hand, high-risk users often show inconsistent data, signs of spoofing (like location manipulation or frequent device changes), or a history of fraudulent activity on other platforms.
With advanced geolocation, you can spot these red flags and apply additional security measures to protect your platform or keep them off your platform for good.
Streamlined operations that boost efficiency and profitability
Fraud costs organizations 5% of their revenue each year- an average of over $1.5 million per case. And that’s not even accounting for the time and resources spent dealing with fraud and risk management.
Fraud costs organizations around 5% of their revenue each year.
Advanced geolocation helps reduce these costs by proactively preventing fraud before it happens. By identifying threats early, it protects businesses from substantial financial losses by blocking high-risk users and transactions in real time and ensuring compliance with critical regulations like sanctions and anti-money laundering (AML).
In addition, advanced geolocation streamlines risk management. With accurate location data, there’s no need to dig through unnecessary information. This is especially true when advanced geolocation is integrated with other fraud detection systems. By automating the detection of suspicious patterns, businesses can drastically reduce the time spent on manual work and low-priority tasks. Real-time anomaly detection means that fraud alerts are sent immediately so risk management teams can act fast.
Completing the puzzle: Why advanced geolocation is the missing piece
Advanced geolocation isn’t just another tool to add to your risk management strategy – it’s the key to solving even the most complex fraud cases. Whether it’s verifying the legitimacy of someone’s identity, tracing the source of a fraud ring, or predicting future threats, advanced geolocation is the missing link that ties everything together. Analyzing patterns to determine a user’s behaviour and risk level can stop fraudsters from switching or resetting devices, spoofing their location, mimicking normal behaviours, or using stolen or synthetic identities to create multiple accounts.
By understanding these patterns, businesses can identify and stop fraudulent transactions in real time, block repeat offenders, and proactively safeguard their platforms. In the fight against fraud, advanced geolocation is your secret weapon. It’s the key to staying one step ahead, adapting to new threats, and ensuring your business remains protected.
Want to see how advanced geolocation can help safeguard your organization? Connect with one of our experts today!
