Deloitte projects $40 billion losses in AI-led fraud by 2027
Deloitte, one of the world’s top professional services firm projects losses due to generative-AI-enabled fraud to reach $40 billion in the US by 2027. This represents an increase of over 200% from the $12.3 billion recorded in 2023 and a compound annual growth rate of 32%.
Also read: AI-Enabled Tax Fraud Poses Challenges for Detection
Deloitte’s Center for Financial Services opines the increase in sophisticated AI tools will be a stepping stone for bad actors to defraud financial institutions and individuals. The group also pegs a more conservative figure of $22 billion which is still a cause for concern.
Readily available software fuels fraud
According to Deloitte, there is a booming industry with readily available software that makes it easy for fraudsters to scam individuals and banking institutions.
“There is already an entire cottage industry on the dark web that sells scamming software from US$20 thousands of dollars,” said Deloitte in their assessment. Deloitte further explained that:
“The democratization of nefarious software is making a number of current anti-fraud tools less effective.”
The firm also cited crypto-related fraud cases, which have been on an increase. In some of the cases, the scammers have used AI deepfakes. One instance is a deepfake AI “gang” that stole $11 million from an OKX crypto exchange account.
In a Cointelegraph Magazine article, OKX founder Star Xu said a “coin-stealing hacking gang” used deepfake AI to bypass the exchange’s facial recognition software.
Deloitte recommends robust defenses
According to Deloitte’s assessment, financial service providers need to adapt to the fast-changing environment. This requires them to invest in robust AI-based defenses, including redesigning their strategies and tools that detect and alert threats. Deloitte remarked that:
“There won’t be any silver-bullet solution, so anti-fraud teams should continually accelerate their self-learning to keep pace with fraudsters.”
Also read: Deloitte Introduces AI Chatbot ‘PairD’ for Enhanced Efficiency
Deloitte cited institutions like JP Morgan and Mastercard that have developed AI-based defenses against fraud.
Another recommendation includes “looking outside the banking sector for third-party technology providers,” while constantly updating biometric and digital identity tools.
Cryptopolitan reporting by Enacy Mapakame
