Generative AI picks up speed among fraud fighters


The use of generative AI is gaining significant traction in the anti-fraud landscape, as 83 percent of anti-fraud professionals expect to integrate this technology into their arsenal within the next two years, according to the latest Anti-Fraud Technology Benchmarking Report by the Association of Certified Fraud Examiners (ACFE) and SAS.

This report, the third in a series initiated in 2019, reflects inputs from a survey of nearly 1,200 ACFE members and was conducted in late 2023. (Cesar Mejia, CPA, is an ACFE Certified Fraud Examiner and leads Sol Schwartz & Associates’ audit team. He frequently provides attorneys with litigation and forensic accounting support.)

Interest surges

The report reveals a dramatic surge in interest in artificial intelligence (AI) and machine learning (ML) technologies, with 18 percent of anti-fraud professionals currently utilizing these tools and an additional 32 percent expecting to implement them within the next two years. This trend signifies a substantial increase in the use of AI/ML in anti-fraud programs, almost tripling by the end of next year.

Despite the fervent interest in AI and ML, the adoption of these technologies for fraud detection and prevention has grown by only 5 percent since 2019, falling significantly short of the anticipated adoption rates revealed in previous studies.

However, while many data analysis techniques have plateaued, the application of biometrics and robotics in anti-fraud programs has seen a steady rise. The use of physical biometrics has increased by 14 percent since 2019, cited by 40 percent of respondents, while the use of robotics, including robotic process automation, has risen to 20 percent, up from 9 percent in 2019.

These technologies are particularly prevalent in banking and financial services, with 51 percent utilizing physical biometrics and 33 percent deploying robotics.

Budget and ethics concerns

ACFE President John Gill highlighted the significance of increasing anti-fraud technology budgets, emphasizing the need for ethical use of these technologies in the ongoing battle against criminal enterprises. With three in five organizations planning to expand their technology budgets, the strategic investment in these tools will be crucial in gaining an edge in the ever-evolving technology arms race.

Stu Bradley, Senior Vice President of Risk, Fraud and Compliance Solutions at SAS, emphasized the complexities of scaling AI and analytics life cycles, underlining the importance of choosing the right technology partner. He emphasized the benefits of deploying modularized solutions across the risk management spectrum on a single, AI-powered platform, outlining SAS’ approach with cloud-native, language-agnostic SAS Viya.

The report also delves into industry-specific trends and sentiments, with a data dashboard provided by SAS allowing users to analyze survey data by industry, geographic region, and company size.

Survey respondents came from 23 industries, prominently banking/financial services and government/public administration, while also including professional services, insurance, healthcare, manufacturing, technology, and education sectors.

The report and data dashboard offer insights into the data analysis techniques, risk areas, data sources, prevalence of case management and digital forensics/e-discovery software, and challenges faced in implementing new anti-fraud technology across various industries. Additionally, it explores the potential impact of generative AI on anti-fraud programs and the considerations organizations need to take into account before embracing this technology.

Cautious optimism

The report reflects a cautious optimism regarding the deployment of generative AI in anti-fraud initiatives. The potential benefits are acknowledged, including the ability to identify anomalies and trends in large volumes of data with minimal resource concerns. However, concerns regarding errors, bias, and ethical considerations underscore the need for responsible innovation in the adoption of generative AI.

ACFE Research Director Mason Wilder emphasized the evolving landscape, with organizations beginning to explore the advantages and disadvantages of using generative AI in anti-fraud initiatives. The anticipation of rapid adoption and technological advancements in generative AI in the coming years adds an intriguing dimension to the ongoing conversation.

In conclusion, the 2024 Anti-Fraud Technology Benchmarking Report sheds light on the evolving landscape of anti-fraud technology, with generative AI emerging as a key focal point. As organizations navigate the complex terrain of AI adoption, the responsible and ethical use of these technologies remains paramount in the fight against fraud.

The convergence of technological advancements, ethical considerations, and industry-specific nuances will shape the future of anti-fraud programs.  Sol Schwartz & Associates will follow these developments closely as we continue to be retained for litigation support and forensic accounting engagements.

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