Onfido Survey: Businesses Risk Losing Trillions by Ignoring the Use of AI for Fraud Prevention

Failing to use AI to fight fraud could result in catastrophic consequences to businesses and the continued acceleration of the world’s $5 trillion annual fraud losses

Onfido, the global leader in automated identity verification, released the results of a study surveying over 1,500 business leaders, examining perceptions, challenges and usages of artificial intelligence (AI). Respondents were from financial services, gaming, retail, healthcare, transportation, legal and telecom industries across the US, UK, and Italy. The research shows that as interest and investment in AI technology soars, leaders are concerned about the growth of AI-powered cyber threats. Despite this, a staggering 73% are failing to act, putting their businesses and the global economy at risk.

This disturbing news revealed by the survey shows that almost seven in ten business leaders (68%) recognize the threat that AI and, more specifically, Generative AI presents for accelerating the speed and quantity of fraud attacks, but less than one in three (27%) are prioritizing its use in fraud prevention. Instead, almost two in five (39%) leaders are focusing on using AI as a catalyst for reducing operational costs and enhancing digital services, creating a blind spot that could upend their businesses.

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Balancing AI priorities 
The hype cycle around AI has been fuelled by the roll-out of ChatGPT last November, with the survey revealing global leaders are now seeing widespread benefits from its implementation. Over three in five (61%) are using AI to boost efficiency and productivity through process automation, while more than half (53%) are implementing the technology to increase the speed of service. Almost the same number (52%) see it as a means to reduce human error or bias in their processes.

Yet, as AI has emerged on the global stage, bad actors have closely followed. It is being used to automate attacks around the clock, and Onfido’s research indicates that these tactics are front of mind for businesses. Just under one in three (31%) expect fraud perpetrated by Generative AI to become a heightened national issue, while worryingly, global leaders have indicated that it’s not where they see the most pressing threats.

When asked to choose from a list, UK and US leaders point to data privacy and consent infringements as their most pressing AI security concern (56% and 64% respectively), while in Italy, 44% said it is synthetic identity fraud. Despite public attention on deepfakes, it is the lowest-ranked perceived threat across all countries: UK (33%), US (32%), Italy (27%).

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Pledging investment 
In light of these fears, leaders recognize that AI can be the best defense against itself. Across the US, UK and Italy, almost two-in-five (38%) see Generative AI applications as being beneficial in automating fraud prevention and empowering fraud specialists to address more sensitive cases. On top of this, one-quarter (24%) say these applications will make fraud easier to identify and stop.

To truly combat the emergence of new threats, global leaders must turn these theories into action, and Onfido’s survey finds some businesses will have the AI budget to make it happen. Within the next five years, almost one-in-five UK (17%) and Italian (15%) leaders and one quarter (24%) of US leaders will invest between 1 million and 2.5 million in local currencies in AI. Around 10% of those in the UK and US will invest between 2.5 million to 5 million, rising to 16% in Italy. This still leaves a worrying 73% who have no plans to use AI to combat the fraud threat coming from AI. Since this is one of the most promising approaches, that gap is concerning.

Responding to these findings, Mike Tuchen, CEO at Onfido, said:”Global companies need to wake up to the fact that the recent development in generative AI and deep learning tools are supercharging the fraudsters’ toolkit. If they don’t take action now and prioritize their investment in AI to fight fraud, catastrophic losses could follow.

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As the threat landscape evolves and bad actors attempt to exploit vulnerabilities through edited photos, submissions of deepfake playbacks on screens, printed images, and 2D and 3D masks, AI is now mission-critical for businesses to adopt.

With so many opportunities for fraudsters to attack online, businesses must develop a multi-layered, holistic approach to fraud prevention. That’s how they will develop the right protections to combat this trillion-dollar problem and flourish in the digital economy.”

[To share your insights with us, please write to sghosh@martechseries.com]