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Why check fraud is on the rise in 2025 and tech’s response

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1 year ago

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Now more than ever, businesses globally have become increasingly susceptible to financial fraud. From the growing threat of AI-enabled fraud, such as deepfake scams, these attempts threaten the financial security and integrity of any business, and when carried out, can lead to detrimental financial losses. 

In fact, according to Medius’ 2024 survey of U.S. finance professionals, 48% revealed they have been targeted by deepfake fraud, and 42% have fallen for deepfake scams. Amid a growing push toward digitization, however, businesses are increasingly adopting and leveraging innovative tools like machine learning and generative AI to keep pace with fraudsters. Yet, amid this push toward digitization still lies a growing threat to businesses as a result of the outdated payments processing systems many continue to use. The main culprit? The persistent use of traditional, outdated paper checks. 

As reported in a 2025 survey by the Association for Financial Professionals, respondents citing the use of paper checks for payments surged to 91%, and a further 63% reported that their organizations faced check fraud in 2024. Counterfeit checks, forged signatures, check washing, and check theft are just some of the common types of fraud associated with the use of paper checks. In the age of digitization and the era of AI, why are businesses still making themselves vulnerable to these types of attacks, and how have digital payments evolved as a critical solution today? 

Getting to the root cause of ongoing paper check use

As the traditional, all-too-familiar form of payment, the use of paper checks still remains an ongoing practice today. Despite their pain points — from longer processing times, risks of forgery, loss and theft, and higher processing costs — an overwhelming 75% of organizations still use paper checks, according to a 2024 report. Among some of the top reasons businesses continue to rely on traditional paper checks include familiarity, universality across businesses, and cost concerns surrounding other alternatives. 

As a decades-long practice, familiarity with traditional paper checks remains a critical reason why businesses have yet to make the transition to digital payments. Intersected with familiarity is also the universality of paper checks on a global scale, whereas digital payments carry the risk of not being an accepted form of payment from businesses who have yet to evolve their own payment systems. 

Digital payment systems for businesses

For every pain point associated with the use of traditional paper payments, digital payment systems offer an immediate solution in response. Digital payment systems serve as a cost-effective solution designed to collectively enhance fraud detection and prevention, improve customer and vendor experiences, and enhance overall operations. Embedded within digital payment systems are advanced security protocols — including encryption and multifactor authentication — critical for reducing the risk of fraud for businesses. Further, the benefits of real-time transaction processing and enhanced monitoring and alert capabilities also enable faster identification of potential fraud. A one-time investment in an advanced digital payment processing system also means that businesses no longer need to rely on added costs from printing and mailing checks and can rest assured that their payments will not be lost in the mail or potentially stolen or forged in the process. 

With faster transaction processing, digital payments mean a more efficient payments process for both customers and vendors in the long term. While technology can be further enhanced and improved to meet the evolving needs of businesses, when it comes to reliance on traditional paper checks, there is little that can be done to entirely prevent fraud and theft from occurring. Businesses that solely rely on the use of outdated paper checks limit their ability to improve operational efficiency and leave their customers and vendors at an increased risk of being targeted by fraudsters. 

Establishing a robust accounts payable audit trail is also made more efficient through the adoption of a digital payment system. Whereas finance teams relying on manual AP audit trails can face difficulties in tracking manual approvals or the risk of loss or destruction of paper documents, an automated AP audit trail enables businesses to better document, monitor and retrieve payment records, to both ensure compliance as well as enhance financial reporting. 

In an era of economic uncertainty, rising costs and the growing threat of fraud, businesses are increasingly looking for new and innovative methods to scale up their operations. By evaluating the systems they currently have in place and making changes to update outdated and risk-driven processes, they can ensure an operating environment of security, efficiency and ongoing innovation. An automated digital payment system is just one method to not only address businesses’ top challenges but also ensure companies are staying ahead of the curve in a growing push toward digital transformation.

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Accounting

Embedded AI and Automated Anomaly Detection Reshape Modern Corporate Accounting Frameworks

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2 days ago

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September 13, 2026

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Embedded AI and Automated Anomaly Detection Reshape Modern Corporate Accounting Frameworks

The accounting and audit landscape in 2026

The accounting and audit landscape in 2026 is defined by the full integration of artificial intelligence directly into core enterprise software platforms. Rather than operating as standalone third-party tools, generative AI, automated reconciliation, and continuous anomaly detection are now natively embedded within major ERP engines including SAP, Oracle, Microsoft Dynamics, QuickBooks, and Sage. This technology integration is transforming daily financial operations, internal reporting controls, and external audit workflows.

Recent industry benchmark surveys reveal a widening performance gap

Recent industry benchmark surveys reveal a widening performance gap between finance teams utilizing integrated AI automation and those relying on legacy manual processes. Organizations actively leveraging embedded AI report up to 37% higher revenue per employee, driven by automated invoice matching, instant ledger entries, and predictive cash flow modeling. Routine, high-volume transactional tasks that once required manual intervention are now executed in real time with continuous digital audit trails.

AI introduces new governance and control responsibilities

However, the widespread deployment of embedded AI introduces new governance and control responsibilities for accounting professionals. Auditing standards now mandate strict verification protocols for algorithmically generated journal entries and financial commentary. External auditors are evaluating enterprise AI governance frameworks, reviewing automated rule sets, testing data ingestion pipelines, and ensuring that financial controllers maintain human-in-the-loop oversight over automated system outputs.

Furthermore, cloud governance and data security have become core operational skills for modern CPAs and controllers. As financial ledgers and client data stream through interconnected cloud ecosystem APIs, accounting teams must implement multi-factor access controls, continuous data encryption, and strict data privacy compliance to protect sensitive financial records from cyber vulnerabilities.

The embedding of AI into enterprise accounting software redefines internal financial controls and career requirements for accounting professionals. Business owners and finance leaders must update governance protocols, invest in staff digital literacy, and ensure accounting systems maintain rigorous audit compliance to capture productivity gains safely.

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Accounting

Mandatory ESG Reporting Standards Demand Standardized Non-Financial Audit Trails

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1 week ago

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September 5, 2026

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Mandatory ESG Reporting Standards Demand Standardized Non-Financial Audit Trails

Corporate accounting departments face an expanded regulatory mandate as mandatory sustainability and Environmental, Social, and Governance (ESG) reporting frameworks take full effect internationally. Governed by the European Union’s Corporate Sustainability Reporting Directive (CSRD) and the International Sustainability Standards Board (ISSB) IFRS S1 and S2 standards, enterprise financial controllers are now legally required to track, verify, and report non-financial data with the same internal controls and auditability as traditional financial statements.

The expansion shifts ESG compliance

This regulatory expansion shifts ESG compliance from marketing departments to corporate accounting offices. Financial managers are now responsible for gathering, consolidating, and verifying carbon emissions metrics, supply chain labor conditions, water usage, and climate risk exposures across multi-tiered corporate structures. These non-financial metrics must be integrated into standardized general ledgers to withstand rigorous third-party audit assurance processes.

To comply with these rigorous reporting mandates, accounting software providers have added dedicated ESG modules designed to aggregate data from IoT sensors, utility platforms, and vendor management systems. Controllers are implementing internal control frameworks—modeled after traditional COSO frameworks—to ensure the completeness, accuracy, and consistency of sustainability disclosures, protecting organizations against greenwashing penalties and litigation risks.

The transition requires significant cross-functional collaboration between accounting teams, legal counsel, and operational directors. Accounting professionals are expanding their technical expertise beyond financial ledgers to master carbon accounting methodologies, lifecycle assessment standards, and non-financial data governance protocols, fundamentally expanding the role of the modern corporate accountant.

Why This Information Matters
Mandatory ESG disclosures require companies to treat environmental and social metrics as audited financial records. Executives, accountants, and board members must institute formal tracking and assurance processes to satisfy legal mandates, maintain investor confidence, and mitigate regulatory non-compliance risks.

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Accounting

SEC’s Semiannual Reporting Proposal Faces Investor Pushback: What CFOs Need to Know

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3 weeks ago

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August 25, 2026

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U.S. Securities and Exchange Commission (SEC)

A proposal from the U.S. Securities and Exchange Commission to potentially shift some public companies away from quarterly financial reporting toward a semiannual model is drawing significant pushback from investors, even as it continues moving through the regulatory process. The debate has direct implications for corporate finance teams, auditors, and the broader transparency of U.S. capital markets.

What the SEC Proposed

According to a summary published by accounting advisory firm Cohen & Co., the SEC issued a proposed rule on May 19, 2026, aimed at simplifying financial reporting requirements for many U.S. public companies. The proposal would potentially reduce the frequency of certain mandatory disclosures from quarterly to semiannual, a structural change that has not been made to core U.S. reporting requirements in decades.

The proposal follows an extended debate within U.S. policy circles, with proponents arguing that reduced reporting frequency could lower compliance costs and free up management time for longer-term strategic planning rather than quarter-to-quarter results management.

Why Investors Are Pushing Back

Comment letters submitted in response to the proposal have been extensive, and according to Cohen & Co.’s review of the public record, investors “appear to be largely opposed” to the shift, viewing frequent interim reporting as a core benefit of U.S. capital markets relative to other jurisdictions.

Accounting and law firms have taken a more measured position, generally urging any changes to remain aligned with the Financial Accounting Standards Board (FASB), whose existing disclosure requirements and guidance are built around a quarterly reporting cadence. A shift to semiannual reporting without corresponding changes to FASB guidance could create friction between SEC filing requirements and GAAP-based disclosure expectations.

Lessons From the U.K. Experience

The debate is not without precedent. The United Kingdom moved away from mandatory quarterly reporting for listed companies in 2014, returning to a semiannual disclosure requirement. According to Cohen & Co.’s analysis, that experience offers a cautionary data point: there was no measurable increase in capital expenditure or R&D investment following the change, while analyst coverage of affected companies declined as reliable interim information became less available — a particular risk for smaller and newly public companies that rely on analyst coverage to maintain investor visibility.

Practical Implications for Finance Teams

Beyond the debate over disclosure philosophy, the proposal carries practical complications. Many companies have debt covenants and credit agreements structured around quarterly financial delivery; a shift to semiannual reporting could require renegotiating those terms. Reduced reporting frequency would also extend the “window of market silence” between disclosures, a factor that governance and investor-relations teams would need to manage carefully to avoid information asymmetry.

Separately, and unrelated to the reporting-frequency debate, the SEC and FASB have continued finalizing more routine updates this year. New Accounting Standards Updates are taking effect for December 31, 2026, fiscal year-ends covering income tax disclosures, credit loss measurement, induced debt conversions, and stock compensation, according to Eide Bailly’s review of 2026 ASU activity. Additional guidance on paid-in-kind dividends and environmental credits is also on the near-term horizon.

What to Watch Next

The semiannual reporting proposal remains in the comment and review phase, and no final rule has been adopted as of this writing. Finance leaders should monitor the SEC’s regulatory agenda for further movement, while treating the current quarterly reporting requirement as the operative standard until any final rule is issued and an effective date is set.

Given the extent of investor opposition documented in the comment file, a full shift to mandatory semiannual reporting appears more likely to result in either a scaled-back compromise or continued study rather than swift adoption — though the SEC’s ultimate direction remains uncertain.

 

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