MUMBAI — Indian enterprises are locked in an escalating battle against automated fraud, with nearly seven in ten businesses now deploying artificial intelligence (AI)-powered defenses to counter a 45% surge in attacks over the past year, according to a new study by global cloud communications platform Infobip. The findings, based on responses from over 1,200 business leaders worldwide—including a substantial sample from India—paint a stark picture of a digital economy under siege, where cybercriminals are leveraging generative AI and advanced bot networks to outmaneuver traditional security measures.
The Infobip report, released this week, reveals that 68% of Indian organizations have either implemented or are actively scaling AI-driven fraud prevention tools, a 22% increase from 2024 adoption rates. The urgency is driven by a sharp rise in automated fraud attempts, particularly in the banking, e-commerce, and telecom sectors, where attackers are increasingly using AI to mimic human behavior, bypass CAPTCHAs, and even impersonate executives through synthetic voice and video deepfakes.
What Happened: A Surge in AI-Powered Threats
The Infobip study highlights a dramatic shift in fraud tactics, with Indian businesses reporting a 52% increase in “synthetic identity fraud”—a method where attackers combine stolen personal data with AI-generated profiles to create fictitious identities for fraudulent transactions. The telecom sector has been particularly hard hit, with a 63% spike in SIM-swap fraud, where criminals hijack phone numbers to intercept one-time passwords (OTPs) and gain unauthorized access to accounts.
In response, companies like Airtel and Jio have begun integrating AI-driven subscriber verification protocols, while banks and e-commerce platforms are increasingly relying on machine learning models to detect anomalies in real time. The report notes that 73% of Indian businesses now prioritize AI-based anomaly detection, while 61% use behavioral analytics to flag suspicious activity. Additionally, there has been a 37% rise in the adoption of biometric authentication, including facial recognition and voiceprints, as businesses seek to counter the growing threat of deepfake-enabled scams.
Ivan Ostojić, Chief Business Officer at Infobip, described the situation as a “systemic risk to India’s digital economy.” In a statement accompanying the report, Ostojić warned that fraudsters are no longer relying on rudimentary phishing schemes but are instead deploying sophisticated AI tools to automate attacks at scale. “Businesses must fight fire with fire by deploying adaptive, self-learning defense systems,” he said.
Why It Matters: The Stakes for India’s Digital Economy
The Infobip findings underscore the high stakes of India’s digital transformation, where rapid adoption of digital payments, e-commerce, and online banking has outpaced the development of robust fraud prevention infrastructure. The Reserve Bank of India (RBI) has repeatedly flagged automated fraud as a critical threat, with its 2025 Financial Stability Report noting that 60% of banking frauds now involve some form of AI or bot intervention. The report also highlighted that digital payment frauds in India surged by 70% in 2025, with losses exceeding ₹1,200 crore ($1.44 billion).
The economic implications are profound. For businesses, the cost of fraud extends beyond financial losses to include reputational damage, customer churn, and regulatory penalties. The Infobip study found that 42% of Indian enterprises experienced a direct revenue impact due to fraud in the past year, while 35% reported losing customers as a result of security breaches. For consumers, the rise in synthetic identity fraud and SIM-swap attacks has eroded trust in digital transactions, potentially slowing the adoption of cashless payments—a key pillar of the government’s Digital India initiative.
The report also raises critical questions about the accessibility of AI-driven defenses. While large conglomerates like Tata, Reliance, and HDFC Bank have the resources to deploy advanced fraud detection systems, smaller enterprises—particularly in the e-commerce and fintech sectors—may struggle to keep pace. This disparity could widen the fraud vulnerability gap, leaving smaller businesses and their customers at greater risk.
Background and Context: The Evolution of Fraud in India
India’s digital economy has grown at an unprecedented pace over the past decade, driven by the proliferation of smartphones, affordable internet, and government-backed initiatives like the Unified Payments Interface (UPI). However, this rapid digitalization has also created fertile ground for cybercriminals. According to data from the Indian Computer Emergency Response Team (CERT-In), cyber fraud cases in India increased by 24% in 2025, with financial frauds accounting for nearly 60% of all reported incidents.
The shift toward automated fraud is a relatively recent phenomenon, fueled by the democratization of AI tools. In the past, cybercriminals relied on manual methods like phishing emails and brute-force attacks, which were easier to detect and mitigate. Today, however, fraudsters are using AI to automate attacks at scale, making them harder to identify and stop. For example, AI-powered bots can now mimic human typing patterns, bypass CAPTCHAs, and even engage in real-time conversations with customer service representatives to extract sensitive information.
The rise of generative AI has further complicated the threat landscape. Tools like deepfake audio and video can be used to impersonate executives, trick employees into transferring funds, or deceive customers into revealing personal information. In one high-profile case in 2025, a Mumbai-based fintech company lost ₹12 crore ($1.44 million) after fraudsters used a deepfake video of its CEO to authorize a fraudulent transaction.
The Indian government and regulatory bodies have taken steps to address the growing threat of automated fraud. In 2024, the RBI introduced stricter guidelines for digital payment security, including mandatory two-factor authentication (2FA) for all transactions and real-time fraud monitoring for banks. The Ministry of Electronics and Information Technology (MeitY) has also proposed amendments to the Information Technology Act to include provisions for AI-driven cybercrimes, though these changes have yet to be implemented.
Competing Claims and Uncertainty: The Limits of AI Defenses
While the Infobip report paints a compelling case for AI-driven fraud prevention, it also highlights significant challenges and uncertainties. One of the most pressing issues is “alert fatigue,” where security teams are overwhelmed by false positives generated by AI systems. Nearly 40% of Indian respondents in the Infobip study cited this as a major operational hurdle, noting that excessive alerts can lead to genuine threats being overlooked.
Another concern is the ethical implications of AI-driven surveillance. The use of behavioral biometrics and real-time monitoring raises privacy risks under India’s Digital Personal Data Protection Act (DPDP), which came into effect in 2023. While the DPDP permits data processing for “legitimate interests,” including fraud prevention, the law lacks clear guidelines on AI transparency and user consent. This ambiguity could lead to regulatory friction, particularly if businesses are perceived as overreaching in their data collection practices.
The Infobip report also does not address the efficacy of AI defenses. While businesses are investing heavily in these systems, there is no independent verification of their success rates. The 45% surge in fraud attempts reported by Indian businesses could indicate either a genuine increase in attacks or improved detection capabilities—both of which would justify AI adoption but require distinct policy responses. Without independent audits or third-party validation, it is difficult to assess whether AI-driven defenses are truly effective or merely creating an illusion of security.
Additionally, the report does not explore the potential for AI to be weaponized by fraudsters. As businesses deploy AI to detect fraud, cybercriminals are likely to respond by developing more sophisticated evasion techniques, creating a perpetual arms race. This dynamic could lead to diminishing returns on AI investments, as businesses are forced to continually upgrade their defenses to keep pace with evolving threats.
What to Watch Next: Regulatory, Ethical, and Technological Challenges
The Infobip findings set the stage for several critical developments in India’s cybersecurity landscape. In the coming months, stakeholders will be closely watching how regulators, businesses, and consumers navigate the following challenges:
1. Regulatory Clarity on AI and Data Privacy: The Indian government is expected to release guidelines on AI governance in late 2026, which could provide much-needed clarity on the use of AI in fraud detection. The guidelines may address issues like transparency, accountability, and user consent, particularly in the context of the DPDP. Businesses will need to ensure their AI systems comply with these regulations to avoid legal repercussions.
2. The Fraud Vulnerability Gap: As larger enterprises scale up AI defenses, smaller businesses may struggle to keep pace, creating a two-tiered system where some organizations are better protected than others. Industry groups like the National Association of Software and Service Companies (NASSCOM) have called for government support to help SMEs adopt advanced fraud prevention tools. Whether such initiatives materialize will be a key factor in determining the resilience of India’s digital economy.
3. The Arms Race Between AI Defenses and AI Attacks: The cat-and-mouse game between businesses and cybercriminals is likely to intensify. Fraudsters are already experimenting with AI-powered tools to evade detection, and businesses will need to invest in adaptive, self-learning systems to stay ahead. The emergence of “adversarial AI”—where attackers use AI to probe and exploit weaknesses in defense systems—could become a major threat in the near future.
4. Consumer Trust and Digital Adoption: The rise in automated fraud has already eroded consumer confidence in digital transactions. If businesses and regulators fail to address these concerns, the adoption of cashless payments and online banking could slow, undermining India’s digital transformation goals. Surveys conducted by the RBI in 2025 found that 28% of urban consumers and 42% of rural consumers cited security concerns as a barrier to using digital payment platforms.
5. Global Collaboration on Cybersecurity: India is not alone in facing the threat of automated fraud. Countries like the United States, the United Kingdom, and Singapore are also grappling with similar challenges, and there is growing recognition of the need for international cooperation. The Infobip report highlights the potential for cross-border collaboration on AI-driven fraud prevention, including the sharing of threat intelligence and best practices. Whether such initiatives gain traction will depend on geopolitical dynamics and data-sharing agreements.
Conclusion: A High-Stakes Balancing Act
The Infobip study offers a sobering snapshot of India’s cybersecurity landscape, where the rapid adoption of AI-driven defenses is both a necessity and a gamble. While AI offers powerful tools to combat automated fraud, its effectiveness remains unproven, and its ethical implications are still being debated. For businesses, the challenge is to strike a balance between security and privacy, ensuring that their defenses do not infringe on user rights or violate regulatory norms.
For regulators, the task is to provide clear guidelines that encourage innovation while protecting consumers. The RBI, MeitY, and other government bodies will need to work closely with industry stakeholders to develop frameworks that address the unique challenges of AI-driven fraud without stifling digital growth.
Ultimately, the battle against automated fraud is not just a technological challenge but a societal one. As India continues its digital transformation, the ability of businesses, regulators, and consumers to adapt to this evolving threat landscape will determine the future of its digital economy. The Infobip report serves as a timely reminder that while AI may be part of the solution, it is not a silver bullet—and the stakes could not be higher.
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