Experian, a leader in data and technology, presents its latest research report, offering insights from senior fraud leaders on how Generative AI (GenAI) is transforming the fraud landscape. Conducted by Forrester Consulting, the report reveals an increase in fraud losses, driven by identity theft, and highlights the importance of robust Machine Learning (ML)-based security measures in the fight against fraud. The research surveyed 449 senior fraud leaders and decision makers across eight countries, including South Africa, India, Norway, Denmark, Spain, Italy, the Netherlands and Germany.
The Impact of GenAI on Fraud
The report identifies a significant shift from individual fraudsters to highly organised fraud syndicates, a trend exacerbated by the advent of GenAI. Nearly three-quarters (73%) of respondents agree that GenAI has permanently altered the fraud landscape, making it more complex and sophisticated. GenAI has also enabled the “industrialisation of fraud”, where fraudsters create and deploy synthetic identities, deepfakes, and other fraud tactics at scale and with ease. As a result, 56% of businesses struggle to identify the use of GenAI in a fraud attack and to quantify its impact on losses. Businesses must take a more proactive approach to fraud prevention through the adoption of advanced, AI-driven solutions and integrations of multiple tools via orchestration platforms – allowing them to more accurately call fraud checks based on risk threats, enhance detection accuracy, and reduce costs.
The Growing Need for Collaboration and Advanced Technologies
With the increasing complexity of fraud threats, collaboration and advanced technologies are more crucial than ever. Close to four out of five fraud decision-makers recognise this, with 78% agreeing that collaboration with external partners is crucial for effective fraud prevention. For example, 63% agree that sharing fraud data through a consortium is an effective way to identify new and emerging fraud trends. 64% of businesses in the research have seen positive return on investment (ROI) from their participation, highlighting the benefits of consortia. This highlights the importance of overcoming data-sharing challenges to enhance fraud detection and prevention efforts.
Machine Learning as the Backbone of Fraud Prevention
Given the increasing fraud threat and the critical role of ML in fraud prevention, the introduction of ML-based models was recognised as a top priority by leaders. Over half (53%) of businesses currently struggle with implementation, citing insufficient training data and 54% lacking quality data. Developing effective ML models in-house is challenging compared to using verified, pre-trained models. By using customisable off-the-shelf ML models, businesses can accelerate deployment and value realisation.
Shail Deep, Chief Operating Officer (COO), Experian EMEA & APAC, said: "As we look ahead, the integration of ML-based fraud prevention is a necessity for businesses to fight back against today's sophisticated fraud threat. Our research indicates that 73% of Fraud experts believe the fraud landscape has been dramatically changed by Generative AI. As a result, over 50% have seen an increase in losses from fraud attacks in the past year. The adoption of new, flexible fraud prevention solutions can no longer be postponed. At Experian, we are continuing to focus on innovation, integrating the latest technologies to enhance detection. Our goal is to create a safer digital world for our clients and consumers, ensuring their personal and financial information remains secure.
To learn more on this report and Experian's fraud prevention services, you can download the full report here. [link]
ENDS
For further information, please contact:
Yolanda Zondo
Yolanda.Zondo@experian.com
+27 (0) 64 753 7152
Sonia Palchetti
Sonia.Palchetti@experian.com
+39 (0) 348 019 9652
Methodology
Experian’s report is based on a commissioned Forrester Consulting survey of 449 fraud decision-makers in Financial Services, Telcos and eCommerce across eight countries, including South Africa, India, Norway, Denmark, Spain, Italy, the Netherlands, and Germany.
About Experian
Experian is a global data and technology company, powering opportunities for people and businesses around the world. We help redefine lending practices, uncover and prevent fraud, simplify healthcare, deliver marketing solutions, and gain deeper insights into the automotive market, all using our unique combination of data, analytics, and software. We also assist millions of people to realise their financial goals and help them to save time and money.
We operate across a range of markets, from financial services to healthcare, automotive, agribusiness, insurance, and many more industry segments.
We invested in talented people and new advanced technologies to unlock the power of data and innovate. As a FTSE 100 Index company listed on the London Stock Exchange (EXPN), we have a team of 22,500 people across 32 countries. Our corporate headquarters are in Dublin, Ireland. Learn more at experianplc.com.