GenAI increases sophistication of fraud attacks, report finds

A new report by Experian reveals that fraud attacks are increasing, largely due to the rise of Generative AI (GenAI). The study, conducted by Forrester Consulting, surveyed 449 fraud protection leaders in various countries, including India. It found that 85% of those surveyed believe GenAI has changed the way fraud is committed. Over half of the businesses reported higher fraud losses in the past year, with 46% noting an increase in fraud attacks overall. Alarmingly, 54% of respondents think that false positives—when legitimate transactions are incorrectly marked as fraudulent—cost more than actual fraud losses. The report stresses the need for better fraud detection systems powered by AI and Machine Learning (ML). About 73% of the leaders agreed that these technologies are key to fighting new fraud threats. GenAI has made fraud more complex, allowing criminals to use fake identities and deepfakes on a larger scale. The findings showed that 50% of businesses struggle to identify attacks driven by GenAI. Industries such as financial services, telecommunications, and e-commerce reported higher fraud rates, with social engineering scams deemed the biggest threat. In India, 77% of fraud decision-makers emphasized the need to collaborate with external partners to tackle fraud effectively. However, many Indian businesses face challenges with their ML models due to insufficient training data or lack of quality data. Experts recommend using customizable ML models to enhance fraud detection. Shail Deep, COO of Experian EMEA & APAC, stated that using ML for fraud prevention is essential in today’s landscape.