AI-Powered Social Engineering: Is Your Business at Risk?
Cybersecurity risk is evolving—and for many businesses, the most significant threats now come from AI-enhanced social engineering attacks that can influence decisions by blending into normal operations and targeting employees, processes and trust itself.
What is social engineering and why does it matter?
This is more than a theoretical risk. Verizon’s 2026 Data Breach Investigations Report shows that 62% of security breaches involve human interaction. This figure has remained consistently high despite advances in security tools.
In other words, even the most sophisticated cybersecurity infrastructure can’t eliminate risk if attackers can directly influence decision-making at key moments.
The risk of social engineering to mid-market companies
Mid-market organizations are increasingly targeted for social engineering attacks because they combine scale with operational complexity. Recent research highlights the scope of the issue:
- 18% of surveyed middle-market executives reported a data breach in the past year.
- Nearly half have experienced invoice fraud or similar schemes, resulting in an average of $300,000 per loss.
These organizations often include these kinds of operations:
- High transaction volumes and vendor relationships
- Distributed teams and communication channels
- Processes designed for efficiency rather than verification
As a result, attackers don’t need to circumvent controls. They can simply impersonate trusted contacts within a company’s own processes.
How AI Is changing the threat landscape
Artificial intelligence (AI) is accelerating the effectiveness of social engineering. Today’s attackers can produce several kinds of highly convincing communications at scale:
- Emails that mirror internal tone, language and formatting
- Requests aligned with active projects or business activity
- Voice and video impersonations using deepfake technology
The data reflects how rapidly this risk is growing:
- Deepfake-related fraud has increased dramatically in recent years, with 43% of organizations reporting at least one audio call incident and 37% experiencing deepfakes in video calls in 2025.
- Generative AI-driven fraud losses are projected to reach $40 billion annually in the U.S. by 2027, compared to $12 billion in 2023.
The implication for business leaders is clear: Professional, realistic communication is no longer a signal of legitimacy. It’s the baseline.
Common social engineering examples in business
Many social engineering attacks follow recognizable patterns, but they’re often difficult to detect because they reflect everyday business interactions. Here are a few possible scenarios:
- Executive impersonation: Urgent requests for approvals or payments
- Vendor fraud: Emails requesting changes to banking or payment details
- Business email compromise (BEC): Compromised or spoofed accounts initiating legitimate-looking transactions
In each case, the attacker’s goal is the same: to create a situation in which acting quickly feels like the right decision.
These aren’t isolated events. In 2025 alone, business email compromise scams resulted in just over $3 billion in losses, according to the FBI.
Why these attacks work
Social engineering succeeds because it aligns with organizational strengths, not weaknesses. Attackers consistently exploit three elements:
- Trust: The request appears to come from someone known.
- Authority: The sender has influence or decision-making power.
- Urgency: The request requires immediate action.
At the same time, they take advantage of common business priorities:
- Responsiveness to clients and leadership
- Efficiency in processing transactions
- Established trust across teams and partners
The risk isn’t that employees will make obvious mistakes—it’s that they’ll make reasonable decisions, but under pressure or with incomplete information.
How to reduce your risk of social engineering scams
Technology does remain an important layer of defense, but mitigating social engineering risk requires a focus on people and process. There are a variety of effective strategies to implement at your organization.
Build verification into high-risk processes
Apply additional controls to activities such as payments and wire transfers, vendor banking changes and sensitive data sharing. Even a brief pause can disrupt an attack.
Require independent confirmation
Verification should occur outside the original communication channel. For example:
- Confirm email requests via phone using a known contact.
- Validate instructions in person when possible.
A single message should never be the sole basis for action.
Reinforce process over hierarchy
No role or title should be reason to bypass verification procedures. In fact, requests from senior leaders or key partners should trigger greater scrutiny, not less.
Normalize the pause
Encourage employees to take a moment before acting on sensitive requests. Simple, professional language—such as “Let me double-check that”—signals to potential scammers that these requests will be verified.
A practical framework for decision-making
Leaders can equip their teams with a consistent approach to evaluating requests:
- Is the request urgent or tied to authority?
- Does it deviate from normal process?
- Has it been verified through an independent source?
These questions take seconds to ask and resolve, but can prevent social engineers from making significant financial and operational damage to your business.
A new approach to trust
Trust remains essential to how businesses operate. It enables speed, collaboration and strong client relationships.
However, in today’s environment, trust must evolve. Organizations should think of trust not as a starting point, but as something to be validated through process, supported by consistent controls and protected through informed decision-making.
Final thoughts: From awareness to action
Social engineering isn’t simply a cybersecurity issue; it’s a business risk that affects operations, finance and reputation.
The most effective response is to introduce intentional friction at critical moments—a pause to ensure procedures are being followed. Organizations that succeed will encourage thoughtful decision-making, normalize verification and align processes with today’s risk environment.
In the age of AI, the goal is not to eliminate trust—it’s to protect it.
How Associated Bank can help
Associated Bank works with businesses to strengthen internal controls, reduce fraud risk and improve cash management processes. To learn more about practical steps your organization can take, connect with your relationship banker or contact Treasury@AssociatedBank.com.
