What Fraud Scenarios Should Every Business Test?

Fraud controls should not only exist on paper. They need to be tested against realistic scenarios that reflect how criminals actually target organisations. This article looks at the fraud scenarios every business should consider testing.

Fraud risk is not limited to one department, one process or one channel. It can appear through payment requests, supplier amendments, onboarding journeys, account changes, executive instructions, application forms, websites, mobile apps, customer support channels and third-party relationships.

As fraud tactics become more sophisticated, particularly through the use of AI, businesses need to understand whether their controls would work under pressure. A policy may state that high-risk instructions require approval. A procedure may explain how callback checks should be completed. A monitoring rule may be designed to detect unusual behaviour. But unless these controls are tested in practice, organisations may not know whether they are effective.

For businesses, the question is not only whether fraud controls exist. It is whether those controls can detect, challenge, escalate and prevent suspicious activity when a realistic fraud scenario occurs.

Why Fraud Scenario Testing Matters

Many fraud incidents exploit familiar weaknesses. A payment is approved too quickly. A supplier bank detail change is accepted without independent verification. A senior executive request is treated as urgent and unquestionable. A new account application passes through onboarding without sufficient challenge. A compromised third-party account is trusted because it appears to come from a known relationship.

AI can make these scenarios more difficult to detect. Criminals can generate convincing emails, synthetic documents, fake business plans, cloned voices, realistic videos, false identities and tailored social engineering messages. This means organisations need to test not only traditional fraud scenarios, but also how those scenarios may change when AI is used to increase credibility, speed and scale.

Testing helps organisations understand how their people, processes and technology work together. It can identify whether controls are clear, whether staff know how to respond, whether escalation routes are effective, and whether systems provide the right information at the right time.

Without testing, businesses may rely too heavily on assumptions. A control that looks strong in a policy may fail if staff are unclear about when to escalate, if systems do not capture the right red flags, or if high-pressure instructions bypass normal processes.

High-Risk Instructions

High-risk instructions should be one of the first areas businesses test.

These may include requests that fall outside normal operating patterns, involve sensitive information, require urgent action, or come from senior individuals, suppliers, clients or third parties. They may also include instructions that are unusual for the channel being used, such as a high-value request submitted through a support form, a payment change sent by email, or a sensitive amendment made through a mobile app.

Testing high-risk instructions helps organisations understand whether staff recognise warning signs and whether the right controls are triggered. This includes checking whether the instruction is verified independently, whether supporting information is reviewed, whether the request is escalated to the correct level of seniority, and whether decisions are recorded.

The aim is to ensure that unusual or higher-risk activity is not processed simply because it appears credible, urgent or senior.

High-Value Financial Transactions

High-value financial transactions remain a key fraud scenario for businesses to test.

Fraudsters often use urgency, authority or familiarity to persuade staff to approve payments quickly. This may involve invoice manipulation, payment diversion, CEO impersonation, fake procurement instructions or a compromised supplier account.

Businesses should test whether approval processes are strong enough to withstand these scenarios. This includes reviewing whether segregation of duties is applied, whether the four-eye principle is used, whether transaction thresholds are clear, and whether high-value payments require independent verification.

Testing should also assess whether staff understand payment diversion red flags. These may include new bank details, last-minute changes, pressure to act quickly, unusual wording, changes in communication style, or instructions that bypass established routes.

Where financial transactions are involved, controls need to be proportionate to the value and risk of the instruction. A higher-risk transaction should trigger stronger verification, clearer escalation and a more robust audit trail.

Credential Changes and Account Amendments

Credential changes and account amendments should be treated as high-risk fraud scenarios because they can provide a route to account takeover, data access, payment diversion or further fraud.

Credential changes may include password resets, changes to multi-factor authentication, new device registrations, account recovery requests or changes to login details. Account amendments may involve bank details, contact details, access rights, delivery addresses, ownership information or payment instructions.

A common scenario involves a fraudster attempting to change supplier bank details before submitting an invoice. Another may involve an attacker changing contact information so that future verification requests are directed to them rather than the legitimate account holder.

Businesses should test whether these changes are subject to appropriate access challenges and independent verification. Staff should not rely on details provided within the request itself, particularly where the amendment involves payment information, access rights or sensitive data.

Testing should also consider whether controls apply consistently across relevant channels, including websites, application forms, mobile apps, customer portals and support teams. If a fraudster can bypass controls by changing channel, the organisation remains exposed.

Out-of-Bound Executive Requests

Out-of-bound executive requests are particularly important to test because they often rely on pressure, seniority and emotional triggers.

A fraudster may impersonate a senior leader and request an urgent payment, confidential information, procurement approval or change to normal process. With AI-generated voice and video becoming more realistic, these requests may appear more convincing than traditional phishing attempts.

Businesses should test how staff respond when an instruction appears to come from a senior figure but falls outside normal process. This includes whether they feel able to challenge the request, whether escalation routes are clear, and whether procedures protect staff from being pressured into acting too quickly.

Strong organisations make it clear that verification is not a sign of mistrust. It is part of good governance. No individual, regardless of seniority, should be able to bypass appropriate controls where the risk is high.

Testing Whether Fraud Controls Work

Fraud controls should be tested in different ways, depending on the process, system and risk involved.

External penetration testing may be appropriate where access procedures create potential entry points for attackers. This can include testing customer portals, supplier portals, application forms, onboarding systems, websites, mobile apps and other external-facing services.

Access testing should not focus only on technical vulnerabilities. It should also consider how systems connect to operational processes. For example, can a fraudulent applicant submit inconsistent information without being challenged? Can repeated attempts be made from the same device or identity pattern? Can automated or machine-like behaviour be detected? Can a user move between channels to avoid scrutiny?

Desktop exercises are also a valuable way to test fraud readiness in a controlled environment. These could include AI-enabled phishing emails, supplier bank detail changes, invoice manipulation, CEO impersonation, fake procurement instructions, compromised third-party accounts, synthetic identity applications or fraudulent account amendments.

The value of a desktop exercise lies in how it exposes gaps. It may reveal that staff are unclear about who owns a decision, that escalation routes are too slow, that systems do not capture the right red flags, or that teams are using different interpretations of the same policy.

Lessons learned should be recorded and turned into practical improvements. This may include updating policies, improving training, refining monitoring rules, adjusting approval thresholds or clarifying fraud response playbooks.

Detection, Reporting and Continuous Improvement

Fraud detection needs to operate across every relevant third-party interaction. This includes clients, suppliers, outsourced functions, new employees, application submitters, website users and other external parties.

Businesses should consider how technology can be used to monitor external-party interactions, analyse unusual behaviour and report out-of-bounds activity. This may include identifying repeated attempts from the same device, recognising unusual patterns of behaviour, detecting machine-like interaction with applications, and prioritising alerts based on risk exposure.

Risk scoring should also be incorporated into onboarding and decision-making processes. Different third parties create different levels of exposure, and a company-wide risk matrix can help ensure the right level of monitoring, due diligence and senior approval is applied.

Effective suspicious activity reporting is also essential. Systems should support the capture of red flags, comments and rationale, with access controlled on a need-to-know basis. Escalation methods should be rapid and straightforward, with fraud response playbooks setting out what to do when specific scenarios arise.

Fraud controls should not remain static. Scenario testing, operational experience, suspicious activity reports, regulatory changes and emerging fraud trends should all feed into continuous improvement.

Training Staff to Recognise Fraud Scenarios

Staff training should reflect the way fraud is changing.

AI-enabled fraud can exploit emotional triggers such as urgency, seniority, VIP status, pressure, fear of delay or a desire to help. Training should help staff recognise these social engineering components and understand how they may appear across different channels.

Employees should also be trained to identify AI-generated documents and synthetic identity indicators. This may include business plans, CVs, diplomas, voices, videos, images or other materials that are key to an applicant’s activities or services.

Social engineering exercises should simulate realistic scenarios, including AI-enabled phishing emails, supplier bank detail changes, invoice manipulation, CEO impersonation, fake procurement instructions and payment diversion attempts.

Training should be practical and ongoing. Workshops, refresher sessions, industry updates and internal knowledge sharing can all help staff stay informed about emerging fraud trends, regulatory developments and process changes.

How AJC Can Help

At AJC, we help organisations test, strengthen and improve their fraud control environment.

Our Fraud Risk Consultancy team supports businesses with fraud risk assessments, governance frameworks, risk appetite statements, policies, procedures, training and remediation activity.

We can also support organisations with fraud awareness training, phishing training, social engineering exercises and scenario-based desktop exercises. These can be used to test realistic fraud scenarios, including high-risk instructions, high-value financial transactions, credential changes, account amendments, executive impersonation, supplier compromise and payment diversion.

Final Thoughts

Every business should test the fraud scenarios most likely to affect its people, processes, systems and third-party relationships.

High-risk instructions, high-value financial transactions, credential changes, account amendments and out-of-bound executive requests are useful starting points. However, scenario testing should not stop there. Organisations should also consider how fraud may enter through onboarding, supplier relationships, customer channels, external applications, websites, mobile apps and outsourced functions.

Fraud controls need to work in practice, not just on paper. Testing helps organisations understand whether suspicious activity is detected, whether staff know how to respond, whether escalation routes are effective and whether decisions are aligned with risk appetite.

As AI makes fraud attempts more convincing and scalable, businesses need to move from assumed protection to tested resilience. The organisations best prepared for fraud will be those that regularly challenge their controls, learn from realistic scenarios and improve before an incident occurs.

Contact us on 020 7101 4861 or email us at info@ajollyconsulting.co.uk if you think we can help.

Sources:

National Cyber Security Centre. Cyber Assessment Framework: Objective A, Managing Security Risk.
Used for general context around governance, risk management and control effectiveness.

National Cyber Security Centre. Cyber Assessment Framework: Principle A4, Supply Chain.
Used for context around supplier and third-party cyber risk.

National Cyber Security Centre. Supply Chain Security Guidance.
Used for wider context on supply chain assurance and good practice.

GOV.UK. Cyber Governance Code of Practice.
Used for context around board accountability, governance and senior leadership responsibilities for cyber risk.