Navigating the dual nature of generative AI: enhancing fraud detection while mitigating risks

Authored by: 
Ramzi Bou Hamdan - Partner, FinCrime Risk Consulting Leader, EY Canada
Yara Elias - EY Canada Senior Manager, AI Risk, Risk Consulting
Saurabh Madan - Manager, Risk Consulting
Dennis Zhao - Senior Consultant, Risk Consulting

Discover the complex landscape of generative AI: a powerful tool in fraud detection, yet a potential gateway for deception.

In brief

• Unveiling the double-edged sword of generative AI: from bolstering fraud detection to enabling deception, explore its intricate role in the fight against financial crimes.
  
  
• Generative AI, a catalyst for innovation and deception, delve into its diverse applications in fraud detection while navigating the risks of deepfake technology.
  
  
• Navigating the risks and rewards of generative AI: explore its pivotal role in fraud detection, alongside the evolving challenges posed by sophisticated cyber fraud tactics.

Generative AI has become a focal point in both the business and technology sectors, showcasing immense potential. When it comes to fraud detection, generative AI acts as a double-edged sword. While it aids anti-fraud efforts, it opens a window for criminal exploitation.

Generative AI supports fraud detection by generating synthetic data, which addresses data imbalance and enhances modeling techniques. It also augments existing approaches by incorporating external data insights and detecting hidden patterns. Additionally, it aids in detecting sophisticated fraud techniques such as fake IDs or synthetic ID fraud. It plays a crucial role in analyzing document metadata to identify fake documents, which became a growing challenge during the pandemic.

On the flip side, generative AI can be misused. It enables the creation of deepfake voices, which can bypass security measures and circumvent voice authentication. It also facilitates the creation of high-quality deceptive content, making phishing attacks more sophisticated and allowing for the creation of convincing profiles for social media scams.

EY’s FinCrime team offers integrated solutions beyond technology, including risk assessments and customized approaches to combat fraud. They emphasize that AI complements professional advisors – it’s not a substitute for them. Learn more about our insights on generative AI and fraud detection: