Rise of the Machines: How AI Shapes the Future of Fraud – and Fraud Fighting
Welcome to the May 2025 edition of our newsletter! In this issue, we’ll examine the evolving role of artificial intelligence both in fraud schemes and combating them.
Professionals and Conmen: Two Sides of the Technological Coin
Once upon a time, corded telephones, fax machines, and mail carriers were each the standard of innovation. Now, their use is on the decline. As we race through the 21st century, will fundamental concepts of mutual trust and cooperation join them in the rear view mirror?
The confluence of artificial intelligence and very natural, human intentions may answer the question for us. Unleashing technology that can replicate documents, human voices, idioms, and likenesses with eerie authenticity – a technology which, in itself, has no set of values beyond whatever its users intend – has created monumental opportunities for fraud. Social media affinity scams from supposed relatives seeking money, a frenzied phone call from a grandchild supposedly in prison while on vacation overseas, a fake document purportedly from a real customer – all of these risks existed in years past, but the technology and time needed to execute them was a barrier to entry for criminals which no longer exists.
On the other side of this equation is artificial intelligence’s ability to help in combating fraud. One area where artificial intelligence can be useful is in workplace fraud, where threats and other crimes are often made anonymously. Humans are pattern seeking creatures, and they also fall into patterns which artificial intelligence, in particular, can detect and use as a fingerprint of sorts. Does a threatening message use certain phrases which an employee might use in his everyday life (and company emails)? Are questioned vendor invoices connected to a post office box used by an employee or her relatives? Such issues can be analyzed by humans quite successfully, but using artificial intelligence can expedite the process without sacrificing the quality of analysis.
Maintaining trust in an era where many fundamental concepts of daily life can be manipulated will be one of the greatest challenges we face in this century. In addition to the bedrock of thorough due diligence to assess the legitimacy of parties, vigilance is needed to understand and question the legitimacy of documents, correspondence, and other parts of the business world whose authenticity which we previously took for granted.