Your Data. Your Case. Your Responsibility.

Fraud investigators know one truth: trust the wrong system, and you’re inviting disaster. Cloud-based AI solutions may promise convenience, but they also expose your most sensitive case files to cyberattacks, regulatory pitfalls, and third-party breaches.

As the Secretary of the Treasury recently cautioned, the growing reliance on cloud vendors is amplifying vulnerabilities—leaving critical investigations at risk of unauthorized access or data misuse. Can your agency afford that kind of exposure?

Unlike cloud platforms, on-premise AI solutions like ScanWriter AI put you in control—your data stays where it belongs, safe from outside threats, providing a reliable and secure environment for your investigations. 

In this article, we’ll uncover six major risks tied to cloud-based fraud investigation tools and see how on-premise options help you safeguard what matters most.

6 Security Risks of Cloud-Based AI Solutions—and How On-Premise AI Eliminates Them

Cloud-based AI is a tempting choice for fraud investigators—fast deployment, powerful scalability, and the freedom to work from anywhere. But here’s the reality: with convenience comes risk. Data breaches, unauthorized access, and a lack of control over sensitive case files can jeopardize investigations and damage public trust.

So, what will you choose? Cloud systems that leave you dealing with vulnerabilities, or on-premise AI that puts security and control back in your hands?

Let us help you decide as we explore the six biggest risks of cloud-based AI and, in contrast, how on-premise solutions eliminate them. Here are these:

#1. Data Breaches and Unauthorized Access

For fraud investigators, every piece of evidence is critical. 

Storing that data in a cloud-based AI system might seem convenient, but it comes with risks you can’t ignore. Cloud platforms are shared environments, often managed by third parties, leaving sensitive case files exposed to breaches, insider threats, and unauthorized access. 

One misstep—a misconfiguration, a phishing attack, or weak access controls—and your investigation could be compromised.

The CJIS Security Policy 2022 also warns: “Data processed or stored outside the physical confines of an organization… brings with it an inherent level of risk.” Investigators have faced fraud, sabotage, and even theft of sensitive case data because they relied on systems they couldn’t fully control.

That’s where on-premise AI stands apart. By keeping your data entirely in-house, on-premise systems eliminate third-party risks. You set the security rules, control access, and ensure sensitive information stays exactly where it belongs—within your agency’s walls.

Discover 10 AI trends revolutionizing financial fraud investigations.

#2. Third-Party Compliance Risks

When it comes to fraud investigations, playing by the rules isn’t optional—it’s essential. However, cloud-based AI often comes with third-party baggage. Your data gets shared, processed, or stored by external vendors, creating compliance challenges that can quickly spiral out of control.

Consider the 2024 incident involving the U.S. Government Accountability Office (GAO) and its IT contractor, CGI Federal. A data breach exposed the sensitive personal information of approximately 6,000 current and former GAO employees, including Social Security numbers, addresses, and banking details. The breach resulted from a vulnerability in a third-party platform managed by CGI Federal. While the GAO was not directly fined, the incident underscores how third-party risks not only compromise sensitive data but also can harm an organization’s reputation.

On-premise AI flips the script. Keeping everything in-house minimizes third-party exposure and lets you stay on top of compliance requirements. Your agency handles the data, sets the rules, and meets legal standards—no external dependencies are required.

To learn more about the use of on-premise AI for fraud investigation, download this ebook now!

#3. Cyber Attacks Targeting Cloud Infrastructure

If there’s one thing cybercriminals love, it’s a target-rich environment—and cloud infrastructure gives them just that. 

In August 2024, a cyberattack on Amazon Web Services (AWS) exposed vulnerabilities across 230 million cloud environments. The fallout? Massive amounts of sensitive data were compromised in one fell swoop.

And the risks are only escalating. Both the NSA and the UK’s National Cyber Security Centre warn that cyber actors are refining their tactics to infiltrate cloud systems as more organizations move sensitive data off-site. The stakes couldn’t be higher for fraud investigators: a successful attack on a cloud-based AI system could expose case files, evidence, and agency intelligence to bad actors.

On-premise AI changes the game. By keeping data within your organization’s network, you gain full control over access points and infrastructure. Cybercriminals can’t exploit what they can’t reach, making on-premise solutions a far more secure option for safeguarding investigations.

#4. Limited Incident Response Control

Investigations demand speed and precision, but cloud-based systems often leave agencies dependent on third-party providers to manage incidents. Whether it’s unauthorized access or data anomalies, waiting for external teams to report, analyze, or resolve the issue can delay critical decision-making.

Even the CJIS Security Policy 2022 acknowledges this risk, requiring third-party users to “report any information security events and weaknesses as quickly as possible.” Yet, the distributed nature of cloud environments can make pinpointing data sources and analyzing issues a slow and cumbersome process—time that fraud investigators simply don’t have.

On-premise AI puts your agency in control. With data managed entirely in-house, your team dictates the protocols, handles incidents directly, and ensures nothing stalls the progress of an investigation. It’s a proactive, efficient approach that gives investigators the security and preparedness they need to stay ahead.

#5. Data Sovereignty and Jurisdictional Issues

For fraud investigators, storing data in the cloud isn’t just a technical decision—it’s a legal risk. When data crosses borders, it becomes subject to foreign laws, potentially exposing sensitive case files to conflicting privacy regulations or even government subpoenas from other jurisdictions.

Governments are taking notice. In 2022, France introduced SecNumCloud certification requirements, mandating that cloud services for government agencies and critical industries be physically located within the country. This move reflects a growing trend across the EU and beyond as nations push for greater control over sensitive data stored on foreign cloud platforms.

On-premise AI solutions offer a clear way to sidestep these challenges. By keeping investigative data entirely within local boundaries, agencies ensure compliance with domestic laws and avoid the risks of conflicting jurisdictions. With on-premise systems, your data stays secure, local, and governed by the rules you trust. 

#6. Uncontrolled Data Backups

Backups are meant to protect your data, but in cloud systems, they can create risks of their own. Cloud providers often manage backups across multiple servers and services, sometimes scattering sensitive information across locations investigators can’t monitor. The result? Data copies multiply in ways that slip beyond your oversight.

Even strict requirements like the CJIS Security Policy 2022, which mandates the sanitization of unused data, don’t always prevent issues. Case in point: in September 2024, a U.S. staffing firm leaked its database backup, exposing the personal details of over 14,000 healthcare workers. The mistake wasn’t in active use—it was in a backup that wasn’t properly secured.

With on-premise AI solutions, that risk disappears. Your agency decides when, where, and how backups are created and stored—keeping every copy under your control. No unexpected duplicates, no misplaced data. Just seamless, secure oversight where it matters most.

By now, it’s clear that on-premise AI solutions offer unmatched security, control, and compliance for fraud investigations. And there’s a tool like ScanWriter AI that not only meets these demands but exceeds them. 

Want to explore how ScanWriter AI compares to other tools? Check out 3 AI Tools Transforming Fraud Investigations Today and see why it’s the ultimate choice for agencies as the most reliable fraud investigation solution.

What Makes ScanWriter AI a Top Choice for On-Premise Fraud Investigation Tool 

Fraud investigations demand precision, security, and efficiency—and that’s where ScanWriter AI delivers. Designed to meet investigators’ needs, this on-premise solution combines advanced AI capabilities with complete control and compliance, helping agencies handle sensitive data and tackle complex cases confidently.

Here’s how ScanWriter AI makes the difference:

• Unparalleled Data Security: Operates entirely on-premise, ensuring sensitive data stays within your agency and eliminating third-party risks.
• AI-Powered Efficiency: Automates data extraction, analysis, and organization to deliver critical insights in minutes, saving valuable investigation time.
• Seamless Compliance: Meets CJIS standards and local privacy laws by keeping data in-house, simplifying adherence to even the strictest regulations.
• Investigator-Level Accuracy: Delivers precise results with comprehensive audit trails, ensuring every outcome is traceable and reliable.

With features like an intuitive ChatGPT-like interface and a customizable prompt library, ScanWriter AI makes even the most complex investigations manageable and efficient. 

It’s more than just a tool—it’s the trusted partner that helps you tackle fraud investigations with speed, accuracy, and confidence.

Book your free demo today to experience the difference ScanWriter AI can make in your investigations.