Fraud losses on the rise: How GenAI is fuelling sophisticated attacks

Generative AI (GenAI) is transforming the fraud landscape, according to a new research report by Experian, a data and technology firm.

Conducted by Forrester Consulting, the study surveyed 449 senior fraud protection leaders across multiple countries, including India, revealing alarming trends in fraud attacks, losses, and the growing need for advanced AI-driven solutions. The report highlights how GenAI has intensified fraud complexity, with 85% of respondents agreeing that it has permanently altered the fraud landscape. Additionally, 52% of businesses reported increased fraud losses in the past year, while 46% noted a rise in overall fraud attacks.

One of the most striking findings is that 54% of respondents believe false positives—legitimate transactions flagged as fraudulent—cost more than actual fraud losses. This underscores the need for smarter, more accurate fraud detection systems. The report also emphasizes the critical role of AI and Machine Learning (ML)-based solutions, with 73% of respondents agreeing that these technologies are essential to combat evolving fraud threats.

Key Insights from the Report:
GenAI has enabled the "industrialisation of fraud," with fraudsters leveraging fake identities, deepfakes, and other sophisticated tactics on a large scale. This has made it harder for businesses to detect and assess the impact of fraud, with 50% struggling to identify GenAI-driven attacks.

57% of financial services, 53% Telcos, and 43% e-commerce saw an increase in overall fraud attacks. According to 74% fraud leaders, the biggest fraud threat is social engineering scams where consumers willingly share the data.

In India, 77% of fraud decision-makers recognize the importance of partnering with external entities to combat fraud effectively. Additionally, 61% agree that sharing fraud data through consortia is a powerful strategy to identify emerging trends. Notably, 74% of Indian businesses reported a positive ROI from participating in such collaborations.

While ML models are crucial for fraud prevention, 48% of Indian businesses face challenges due to insufficient training data, and 60% cite a lack of quality data. Customizable off-the-shelf ML models are recommended to accelerate deployment and improve fraud detection capabilities.

Shail Deep, Chief Operating Officer (COO) of Experian EMEA & APAC, added, “The integration of ML-based fraud prevention is no longer optional—it’s a necessity. With 85% of fraud experts acknowledging the transformative impact of GenAI, businesses must adopt flexible, advanced solutions to combat today’s sophisticated fraud threats.”