AI fraud is quickly emerging as a major threat to Canadian organizations, with nearly three-quarters (72 per cent) losing as much as five per cent of their annual profits to AI-driven scams last year, new research from KPMG Canada shows.
The findings underscore an increasingly complex fraud landscape as 81 per cent of businesses that experienced fraud in the past year say they faced an AI-enabled attack with seven in 10 being targeted more than once. As a result, nine in 10 (94 per cent) business leaders say they are concerned about encountering AI-powered attacks in the year ahead. Yet despite the risks, only 26 per cent have a comprehensive and tested response plan to defend against AI–enabled attacks such as deepfakes and voice clones, said the company in a report released on Monday.
“AI–powered fraud is changing the ground rules. Canadian organizations aren’t just seeing more attempted attacks – they’re more sophisticated, harder to spot and faster to execute, leaving many businesses vulnerable and unprepared to fight back,” said Myriam Duguay, Partner and National Leader of Forensic Investigation, Integrity and Dispute Services at KPMG Canada.
“Beyond the immediate financial hit, the reputational fallout from a fraud attack can be devastating. A single scam can shatter customer confidence, result in lost business, and leave lasting damage to a company’s brand. Now, with rise in AI-powered attacks that can mimic legitimate business interactions with alarming accuracy, the margin for error becomes razor-thin and having strong fraud defences is even more essential.”
The most common attacks they encountered were AI-generated phishing emails/chats (60 per cent), deepfake documents (39 per cent) and voice–clone executive impersonation calls (24 per cent), said the report.
Key poll highlights:
- 72 per cent say they lost between one and five per cent of their business profits to AI-powered fraud attacks in the past 12 months
- 81 per cent of 251 Canadian business leaders surveyed by KPMG who experienced fraud in the past 12 months say the attack was AI-enabled
- 72 per cent of organizations which experienced AI-enabled fraud attacks last year say they were targeted more than once
- 94 per cent say they are concerned about the risk of AI-powered attacks targeting their organization in the next 12 months
- 26 per cent say they have a formal, comprehensive and tested fraud incident response plan that explicitly covers AI-enabled attacks
As AI–enabled fraud becomes more frequent and difficult to detect, Canadian businesses are increasingly deploying AI as a defensive tool, with over half (52 per cent) saying they are directly “fighting AI with AI” by leveraging the technology to identify anomalies, authenticate users, and detect manipulated content. Recognizing the need to bolster their defences, six in 10 respondents plan to increase their fraud prevention and detection budgets by up to seven per cent this year. Further, 81 per cent of companies conduct employee fraud awareness training every six-to-12 months. Key investment areas include detection technology, employee training and transaction controls, added KPMG.
“Businesses recognize that they are facing a new reality in the fight against fraud, and they’re deploying advanced tools to keep pace with fast–moving threats,” said Marilyn Abate, a partner in KPMG Canada’s Risk Services practice who specializes in fraud and forensic investigations in the financial services industry. “While that’s a good step forward, technology alone isn’t enough. It’s not just about buying technology; it’s about equipping people to use it well, closing skills gaps, and running programs that evolve just as quickly as the threats.
“The good news is that organizations are no longer standing still – they’re starting to invest, adapt, and treat AI–enabled fraud as a strategic business risk. While momentum is building, many organizations still have significant work ahead to fully modernize and strengthen their defences against rapidly evolving AI–enabled fraud.”
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