Leveraging data analytics for fraud detection: The future of financial risk mitigation and regulatory compliance
Chibuzor Njoku, Genevieve Okafor, Ehisuoria E. Akhuemonkhan, Ifeoma Naibe, Aniel K. Diala · Computer Science & IT Research Journal · 2025
The increasing complexity of financial fraud schemes has necessitated the adoption of advanced data analytics, AI-driven fraud detection models, and forensic accounting tools to strengthen corporate fraud prevention and regulatory compliance. Traditional fraud detection techniques have proven inadequate in identifying sophisticated financial crimes, prompting organizations to integrate predictive analytics, machine learning algorithms, and real-time transaction monitoring systems to mitigate fraud risks. This paper examines how data analytics enhances financial risk mitigation, the role of AI in automating fraud detection, and the challenges associated with implementing data-driven fraud prevention models. Additionally, it explores the global impact of regulatory frameworks, such as the Sarbanes-Oxley Act (SOX) and international anti-money laundering directives, which drive the adoption of AI-powered risk assessment strategies. By analyzing case studies of multinational corporations that have implemented data-driven fraud detection mechanisms, this research highlights the effectiveness of forensic data analysis in improving corporate transparency and compliance. The findings suggest that AI and data analytics will continue to redefine financial fraud prevention, ensuring corporate integrity and investor confidence in an increasingly digitalized financial landscape. Keywords: Fraud detection, Data Analytics, Ai-Driven Fraud Prevention, Financial Risk Mitigation, Regulatory Compliance, Predictive Analytics, Forensic Auditing, Machine Learning in Fraud Detection, Blockchain Technology in Fraud Prevention, Corporate Financial Security.