A recent study, conducted by Forrester Consulting and commissioned by Experian, a leading global information services provider, sheds light on a troubling surge in fraudulent activities in India. The study finds that a staggering 64 per cent of respondents have experienced a notable increase in fraud losses over the past year. Compounding this issue, 67 per cent of these respondents are struggling to keep pace with the rapidly evolving landscape of fraud threats, according to a press release issued by Experian.
The study underscores the importance of artificial intelligence (AI) and machine learning (ML) technologies in the future of effective fraud prevention. These advanced solutions can analyze extensive datasets swiftly, identify anomalies promptly, and unveil fraudulent patterns. This proactive approach not only protects businesses from significant losses but also strengthens the integrity of financial ecosystems.
Fraud Losses On The Rise: Year-on-year fraud losses are increasing for nearly two-thirds (64 per cent) of respondents, with financial services organizations reporting the largest surge in losses.
Factors Driving Fraud Attacks: Financial pressure on consumers, data breaches leaking sensitive information onto the dark web, and the accessibility of Generative AI have contributed to the rise in fraud attacks.
Types Of Fraud Attacks: Synthetic identity attacks, identity theft attacks, account takeover attacks, and friendly fraud attacks in the eCommerce sector are all on the rise.
Challenges In Fraud Prevention: Lack of device fingerprinting for fraud identification and an increasing number of referrals are the biggest challenges limiting businesses' ability to prevent fraud.
Future Of Fraud Prevention: Nearly two-thirds (67 per cent) of businesses believe that AI/ML-powered solutions will drive the future of fraud prevention. Transparent ML models, continual automatic model retraining, and real-time analysis are crucial for staying ahead of evolving fraud threats.
Manish Jain, Country Managing Director at Experian India, emphasizes the importance of AI in addressing the evolving fraud landscape. He highlights AI's ability to swiftly adapt and provide real-time analysis, actively defending against ever-changing threats. “As technology advances, the landscape of fraud undergoes shifts, creating new complexities. The rise of advanced technology transforms fraud dynamics, challenging established securities, and breaking down barriers. Addressing this challenge requires a potent solution – AI," says Jain.
"Unlike traditional methods, AI excels in swift adaptation and real-time analysis, actively defending against ever-changing threats. Unlocking the power of data and machine learning, AI becomes a custodian at digital gateways, ensuring consumer protection and preventing substantial losses for businesses. It plays a pivotal role in fortifying security, protecting businesses from significant financial risks, and building a robust credit ecosystem." adds Jain.
Experian's study surveyed 308 fraud managers in the financial services, telecommunications, and eCommerce sectors across ten countries in the EMEA and APAC regions, including India, Denmark, Germany, Australia, Italy, New Zealand, the Netherlands, South Africa, Spain, and Turkey.