Despite the prominence of cyber fraud, from ransomware to deepfakes – the threat of procurement fraud remains in the top three fraud the threats faced by organisations globally.

Procurement fraud was voted one of the three most disruptive economic crimes experienced by companies globally, with losses as high as 5% of annual revenue through occupational fraud in 2025.

Yet nearly half are not currently using any specific tools to combat the risk, or are only using reactive controls when an issue is identified.

This is despite the demonstrated payoff for companies who use automated or continuous control monitoring software tools that can detect anomalies through real-time monitoring and machine-learning.

Why procurement fraud happens

Third-Party Risks

Fraud by external stakeholders, such as agents, vendors and customers, is common and represents a serious threat to organisations of all sizes. A lack of transparency and over-reliance on vendor self-reporting can compound the risk.

Examples might include conflict of interest – an employee passing work off to a relative, falsified invoices

Inadequate Oversight

Many financial controls rely on people and IT controls, making it easy for human error, or gaps in the control processes to occur. Issues like fraud are only picked up if stumbled across, or through an expensive audit process many months after the fraud has or started occurring.

Automated technologies using data and AI are the best ways to detect potential fraud in real-time.

Technology Gaps

While digital procurement systems improve visibility and traceability, they introduce new complexities with platform integration, inconsistent data capture and increased cyber threats. These vulnerabilities can be exploited by sophisticated fraud actors. However, software driven financial controls can also be the solution, by monitoring the control gaps and detecting issues before they happen.

Current drivers of procurement fraud

Just like other types of fraud, procurement fraud and those who look to commit it, are changing up methods to take advantage of technological, regulatory and geopolitical shifts. These include:

Digital Transformation

The implementation of artificial intelligence, robotic process automation and e-invoicing platforms have streamlined procurement workflows.

However, these innovations have also opened new fraud channels, for example, through spoofed vendor emails, falsified digital invoices and manipulation of automated approval systems.

Regulatory Shifts

Updates to the Australian Government’s Commonwealth Procurement Rules in 2025 have placed a renewed emphasis on ethical sourcing, support for Indigenous-owned businesses and the transition to net-zero supply chains.

While these initiatives are socially and environmentally important, they can complicate risk assessments and necessitate more nuanced due diligence processes.

Global Supply Chain Disruptions

Supply chain instability, driven by international conflict, pandemic recovery and environmental factors, has created greater urgency and reduced scrutiny in some procurement settings as businesses look to get things done in an uncertain environment. This often leads to shortcuts when vetting vendors, contract management and invoice validation, creating conditions ripe for fraud.

What’s the solution?

Technology, which can automate the detection process and use machine learning to pick up anomalies, even for conflict of interest, is the proven solution.

Put simply, companies with automated monitoring software – alongside good policies and clear roles and responsibilities – experience less fraud.

Satori saves its clients on average $5 million a year in potential errors and fraud through its products Verify and OK2Pay.

For more information on how to combat procurement fraud, download our ebook.

In this ebook, you will get:

• A detailed framework to assess your procurement fraud risk profile
• A financial control maturity model to assess where your organisation sits
• Advice on how to develop best practice financial control processes including policies and roles
• Tips on how to choose the right software solution for you

Case studies and information outlining the potential return on investment.