Small and medium-sized businesses are looking to their financial institutions to provide the technology they need to monitor payments fraud.

In 2025, fraud, scams and ransomware cost small businesses roughly $131 billion, with 29% of that payments fraud, according to Public Private Strategies Institute’s Fraud, Scams, Ransomware: Small Businesses React report. The survey polled 506 U.S. small business owners from Dec. 19-29, 2025.  

To combat payments fraud, 58% of midsize companies tap their bank’s fraud prevention solutions, according to Citizens Bank’s 2026 Payment Trends, which surveyed 300 financial leaders in that sector. The survey was conducted with market research firm Escalent between March 24 and April 2.  

Nearly half – 48% – of respondents said they use third-party providers for fraud prevention.  

SMBs are tapping AI and ML for fraud detection, according to the Citizens report. Businesses that have deployed AI and ML for real-time monitoring have reported a lower incidence of fraud. 

Sixty percent of companies that use AI or ML were not impacted by payment fraud, according to the survey. 

While AI and ML are producing results in fraud reduction, fewer respondents reported using AI for fraud mitigation this year, clocking in at 43% of respondents, down from 51% in 2025.  

Although fewer respondents reported using AI for fraud mitigation, it doesn’t mean that deployment of AI for fraud prevention is actually down – it’s likely just less visible to the companies, Jen Martin, head of fraud and disputes at Citizens Financial Group, told FinAi News. 

“The survey suggests many businesses are relying on their banks for fraud, protection, which means they may be benefiting from AI and machine learning without realizing it,” Martin said. 

Along with AI, businesses are deploying these fraud detection tools: 

• Real-time fraud monitoring; 

• Two-factor authentication; 

• Employee training; 

• Automated bank security service Positive Pay; and 

• ACH Positive Pay.  

“Companies should have thorough conversations with their financial services providers to select the best payment products for their needs, including understanding the associated risk and controls associated with fraud prevention,” Martin said. 

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