Businesses intend to increase fraud budgets driven by investments in artificial intelligence (AI) and machine learning (ML) technologies, according to Experian's 2024 Global Identity and Fraud Report. The report spotlights "huge growth in highly personalised GenAI-driven fraud attacks" and emphasises that "Businesses must employ a multi-layered approach to fight GenAI fraud."
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Businesses Boost Fraud Budgets
Based on combined insights from over 1,000 businesses and fraud leaders and 4,000 consumers worldwide, the report emphasises businesses' intent to increase fraud prevention budgets, focusing on AI, machine learning, and multi-layered strategies to counter evolving threats.
Complex Drivers of Fraud
Experian's report sheds light on three key factors driving the complexities of the fraud landscape in the financial services sector: advancements in Generative AI (GenAI), changing government regulations, and rising consumer expectations for secure yet seamless digital experiences.
"Unlike other issues facing financial services companies, fraud operates beyond geographical boundaries or regulatory frameworks, and fraudsters often attack different points across the consumer journey," said Greg Wright, Executive Vice President of Identity and Fraud at Experian. "This unfortunate reality compels businesses to leverage advanced analytics, alternative data insights, data sharing, and a multi-layered approach to combat evolving fraud threats globally."
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Balancing Security and User Experience
The report also highlights a critical insight: consumers continue to demand a balance between fraud protection and a positive user experience. Many switch providers after encountering delays during account opening or transactional experience.
To address these concerns, the report urges businesses to align their fraud prevention efforts with user experience by adopting solutions that authenticate customers seamlessly.
"The solution is to leverage analytics and orchestrate fraud-prevention routines for a 360-degree view of customers, mitigating fraud and offering a seamless customer experience," Experian said December 13. .
