Experian‘s research ‘Proactive Defense: Tackling Evolving Fraud Threats’ conducted by Forrester Consulting, surveyed more than 400 senior fraud professionals and decision makers across different countries, such as India, Norway, Denmark, Spain, Italy, the Netherlands and Germany.
As mentioned in the update from Experian, a notable “73% agree that Generative AI (GenAI) has permanently altered the fraud landscape.”
Other key findings from the Experian research report are:
- 54% have seen fraud losses increase in the last 12 months.
- 73% believe fraud orchestration platforms are becoming essential to manage multiple fraud tools.
- 71% agree that AI/ML based fraud solutions are critical to stay at pace with a growing fraud threat.
Experian, a data and technology provider, released its latest research report, offering insights from senior fraud professionals 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.
The report identifies a significant “shift from individual fraudsters to highly organized 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 enabled the “industrialization 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.”
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 recognize 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.”
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 customizable off-the-shelf ML models, businesses can “accelerate deployment and value realization.”
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.
Methodology
Experian’s report is based on a commissioned Forrester Consulting survey of 449 fraud decision-makers in Financial Services, Telcos and eCommerce.