Fraud prevention and digital transformation: building resilient culture and robust controls

Anti-fraud measures for corporations aren’t simply an operational exercise, nor a mere policy. It requires the convergence of cultural, operational and financial functions, demanding collaboration and consideration across the organisation.

The most important fraud prevention measures include conducting regular risk assessments, investing in advanced security technologies and fostering a culture of transparency and accountability within the organisation.

Marco Ehlert Partner

By combining digital transformation initiatives with cultural considerations and close multidisciplinary partnership, organisations can stay vigilant and well defended against fraud in 2026 and beyond.

The “fraud triangle” and the humans at its centre

Before building preventative measures, it's essential to understand what drives fraudulent behaviour. The fraud triangle of “pressure”, “opportunity” and “rationalisation” demonstrates how fraud is perpetrated by people, not systems. Whilst technology can help close the “opportunity” corner of the triangle, the “pressure” and “rationalisation” corners are deeply human factors. Even as technology evolves, the human element remains central to both committing and preventing fraud.

Fraud isn’t committed by machines, it’s committed by people. To effectively combat fraud, organisations must focus on two key areas: understanding human behaviour and harnessing human capabilities.

Keeran Madhav Director - Forensic Services

Despite changes in technology, fraudsters are not reinventing the wheel; they're using newer, more sophisticated technologies to execute the same strategies. So whilst our defensive technologies must advance, the fundamental principles of fraud prevention remain grounded in human behaviour and organisational culture.

Effective fraud prevention isn't a forensic problem, a technology problem or a governance problem – it's all of these simultaneously. The most successful prevention programmes recognise this reality and structure themselves accordingly.

This integration creates what might be called "defence in depth": multiple layers of protection that reinforce each other. An individual with pressure and rationalisation may encounter opportunity in one area, only to be deterred by controls in another. A sophisticated fraud scheme that circumvents automated controls might be caught by human review. A novel approach that evades current detection methods might be revealed through routine audit procedures.

Risk awareness: the neglected cornerstone of fraud prevention

Perhaps the most critical fraud prevention principle is comprehensive risk assessment and cultural risk awareness.

"Studies show that the exclusive use of control-based approaches alone is proving insufficient to counter the risk of fraud today. Creating risk awareness is key to combatting fraud."

Kurt Kuckelmanns Partner

Empowering employees to recognise risks and respond appropriately in the future must be a central goal of any preventive efforts. Time pressure, repetitive routines and fear of retaliation already contribute to risk, adding to the challenge of spotting and preventing fraud. Bad habits like password sharing and strong allegiances like blind obedience can be hard to break, so proactive and context-specific training is required to overcome these challenges and help employees recognise risk when they encounter it.

The key to effective risk awareness isn’t online modules, dense policy text or opaque regulations, but rather the personal integration of participants into scenarios directly relevant to their jobs. Real-life dilemmas, exciting thought experiments and realistic role-playing will create the skills needed to understand and identify risk in their organisation.

Risk awareness, however, is not enough on its own; proactive risk assessment is required to effectively prevent fraud. By working across disciplines and functions to assess risk holistically, organisations can create detailed risk profiles to identify which functions, processes and areas of the business are the most exposed to possible fraud.

Risk assessment isn't a one-time exercise; it requires understanding your organisation's unique vulnerabilities, from financial reporting intricacies to cross-border tax exposures. Consider this fundamental insight:

"When it comes to fraud, means come before motive. If there's an opportunity to commit fraud, someone will eventually exploit it. Proper risk assessment helps identify these opportunities before they're exploited." 

- Erik Lioy, Partner, Forvis Mazars US

Digital transformation: the prevention multiplier

Digital transformation can be a powerful fraud prevention tool. When organisations digitise more and more operations, they create opportunities for automated checks and balances that can surface otherwise easily hidden deceptions. Digital fraud detection in enterprises make it easier to prevent fraudulent activity, because they can often process larger amounts of data more quickly and recognise patterns more effectively than manual reviews.

"Digitalisation is a no-brainer when it comes to fraud prevention. Digital checks and balances can help surface otherwise easily hidden deceptions and respond to them faster and more effectively."

Darya Oglezneva Director - Forensic and Investigation Services

The transformation challenge varies by organisation size. The larger you become, the more complicated manual processes become, and the more risk they introduce. Yet digitisation itself grows more complex at scale. And digital transformation is not a silver bullet; as discussed, human skillsets and appropriate escalation points must be utilised for effective fraud prevention.

But what about AI? As more and more organisations leverage it, can it replace human oversight, or at least supplement it meaningfully, when it comes to fraud prevention?

Advanced data analysis and AI are revolutionising fraud detection, but they require a solid foundation. Data governance remains a significant challenge. Some organisations – typically massive entities in industries like banking – are using AI to monitor communications, but they're outliers, enabled by vast amounts of data and huge resources for fraud prevention. This capability will eventually trickle down, but it requires a critical mass in data volume and quality that many organisations just don’t have.

However, despite technological advances, human judgment remains essential for interpreting automated alerts, understanding context and recognising novel schemes that algorithms haven't encountered. The best fraud prevention programmes will include layered defences that neither over-rely on automation nor depend solely on manual reviews.

Compliance in fraud prevention: both motivator and complication

Regulatory pressure has historically focused on bribery and corruption, particularly regarding foreign government interactions, but it's expanding rapidly. Modern organisations face what some experts have referred to as being "complianced out" – in other words, feeling overwhelmed by regulatory requirements without clear roadmaps for holistic implementation. The UK's "Failure to Prevent Fraud" legislation exemplifies this trend, with regulators expressly keen to prosecute organisations lacking adequate preventative measures, but with the specifics of those measures remaining largely subjective.

The fraud and compliance landscape becomes exponentially more complex for international organisations in particular. The more authorities that are involved, the harder it becomes to identify potential fraud, as authorities don't easily share information. Whilst some directives aim to improve information sharing, like the European Commission’s initiative to standardise invoicing for fraud detection purposes, challenges remain significant.

This is where integrated, international governance expertise becomes crucial. The foundation of good governance includes policies, internal controls, guidelines and process descriptions, and helpfully these are the starting point for both compliance measures and fraud prevention strategies. They can even be taken into account in court when investigating and prosecuting fraud. Building the right frameworks across borders requires understanding not just local regulations but how they interact in order to identify weak points where fraud could occur. Prevention measures have evolved from minimisation strategies to risk management and ethical compliance.

Mitigating measures: internal controls for fraud prevention

The best fraud prevention programmes combine behavioural controls with infrastructural ones.

"When you’re crossing the street, you have infrastructure to tell you when it’s safe to cross: road markings, crossing signs and lights, etc. But you also have behavioural controls like looking both ways and listening to traffic. The most effective fraud prevention measures incorporate both of these approaches to bring risk to an acceptable level."

Caroline Leblanc

Infrastructural fraud prevention measures

The nature of the controls that will be most effective depends on your organisation's operational characteristics, including where you are in your digital transformation journey, but the principle remains constant: controls must be risk-based and proportionate.

Some preventative measures to consider include:

●     A combination of digital and manual checks in key processes like procurement, sales, payroll or any other high-risk areas as identified in multidisciplinary risk assessments. The key is layering controls appropriately. Not every transaction requires the same scrutiny. Risk assessment determines where to concentrate preventative efforts.

●     Internal audit; even the presence of this function can discourage fraud, as it helps cultivate a culture of accountability and creates the expectation of oversight.

●     Red teaming exercises, which can simulate both external and internal fraud scenarios, help reveal weaknesses that theoretical assessments miss. These exercises benefit from diverse perspectives: forensic investigators who understand fraudster methodologies, tax specialists who can recognise evasion schemes, consultants who see operational vulnerabilities and governance experts who can help identify compliance gaps.

Detective controls, on the other hand, identify fraud after it occurs but before it causes catastrophic damage. Technology amplifies detective capabilities dramatically. When operations are digitised, organisations can implement automated monitoring that flags anomalies – unusual transaction patterns, duplicate payments, vendor irregularities – for investigation. However, criminals are also leveraging technology, creating an ongoing arms race that requires constant vigilance and adaptation.

Behavioural fraud prevention measures

No technical control system succeeds without appropriate organisational culture. The most important behavioural fraud prevention measures include:

●     Top management education and activism, creating a top-down culture of accountability. Leaders should be vocally fraud aware to help the rest of the workforce feel empowered to prevent and detect fraud when they encounter it.

●     Education and training to make the work force more fraud aware, including both how to spot and identify possible fraud and how to report suspected fraud.

●     Clear channels for reporting fraud, and clear guidance on your protection for whistleblowers. This must be backed up culturally, but having clear documentation and ensuring employee awareness of these channels will help significantly.

●     Clearly documented policies and code of conduct; these should be easily found by employees and regularly updated to reflect the organisation’s developing structure and risk profile.

Creating a climate where employees feel free to report concerns is essential. Whilst regulation often protects whistleblowers, especially in countries like France, cultural attitudes towards reporting have the power to undermine these protections in any organisation.

Making the workforce risk-aware requires ongoing education, not one-time training. Employees should understand not just policies but the reasoning behind them and their role in fraud prevention. Communication should emphasise that fraud prevention protects the organisation and its employees, not just shareholders or regulators.

Building a future-ready strategy for fraud prevention

The good news is that prevention and detection capabilities built for fraud also often improve operational efficiency, compliance posture and risk management more generally. Digital transformation undertaken for fraud prevention also streamlines reporting. Controls designed to prevent financial statement fraud also catch errors and inefficiencies. Training that makes employees fraud-aware also improves their decision-making generally. This is why a multidisciplinary approach to fraud prevention is so crucial: because the benefits are as varied as the input considerations.

The question isn't whether fraud will target your organisation. It will, and likely soon. The question is whether your integrated defenses will detect and prevent it before it causes lasting harm.

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