91% of Mid-Sized Firms Plan to Expand AP Automation to Combat Fraud

As cybercriminals target more businesses, accounts payable (AP) departments are more vulnerable to fraud. With more than 80% of U.S. companies affected by sophisticated digital payment fraud, the need for reliable security systems is crucial. While digital transformation has brought many benefits, outdated payment systems can leave organizations exposed to emerging threats.

According to a PYMNTS Intelligence report, “Winning the Fraud Fight: How AP Automation Can Deflect Rising Security Threats,” in collaboration with Finexio, modern AP automation solutions with real-time monitoring and fraud detection are becoming critical for safeguarding against these risks.

AP Risks of Cyberfraud

Cyberfraud is a pervasive issue, with U.S. companies experiencing a dramatic increase in attacks. Last year, 83% of companies reported being targeted by cybercriminals using tactics like phishing, deepfakes and hacking. Consider 96% of companies experienced at least one fraud attempt, up from 56% the previous year, with 94% reporting multiple attacks. Wire transfer fraud, vendor fraud and CEO fraud comprised the top three types of fraud incidents. As fraud attempts grow, 66% of businesses expect these risks to rise.

Increased fraud illustrates the vulnerability of companies that still rely on outdated payment systems and manual processes. Specifically, business email compromise (BEC) schemes remain the most common fraud tactic, affecting 63% of firms, with ACH credits being the most frequently targeted payment method. The need for advanced fraud detection systems to mitigate these risks is clear, especially as remote work and digital operations create new avenues for fraud.

Legacy Payments Fuel Scams

While digitization has enhanced business operations, it has also opened the door to new fraud risks, especially in companies still relying on manual processes. Legacy systems, including checks and paper-based payment methods, remain highly susceptible vulnerable to fraud. According to the report, last year 65% of companies reported check fraud, making it the most common type of payment fraud, nearly double the rate of ACH debits, which stood at 33%. Despite the risks, 70% of firms continue using checks, showing a large gap between awareness and action.

Human error exacerbates the problem, with nearly 74% of chief information security officers citing it as the top cybersecurity risk, up from 60% in 2023. This underscores the importance of adopting digital solutions that integrate fraud detection and automate payment processes to minimize exposure to fraud. Modern AP automation systems can enforce compliance checks and monitor transactions in real time, reducing the likelihood of fraud.

AP Automation Fights Fraud

Manual processes no longer suffice in protecting AP departments from rising fraud risks, according to the report. Automation offers a proven solution, as the report notes payment fraud prevention is a top benefit for companies automating AP. Two-thirds of mid-sized firms have already automated some payment disbursements, and 91% plan to expand their automation efforts.

Automated systems reduce human error and enhance fraud detection through AI-powered real-time monitoring. Partnerships like Finexio and Emburse integrate AI to improve fraud prevention, while adding advanced security measures such as KYC, AML protocols, and sanctions screening, ensuring payments are thoroughly vetted without sacrificing efficiency.