A recent report states that scammers can easily and quickly create fake companies using artificial intelligence. This is a major concern for the B2B market.
The Association of Certified Fraud Examiners (ACFE) and Thomson Reuters created the “Combatting Business-to-Business Fraud Benchmarking report” which revealed that the “synthetic identities” as well as the potential fines and regulatory actions are the most significant fraud-related risk for businesses who want to establish relationships with new customers or vendors.
More than 60% of the businesses surveyed said it was either moderately or very difficult to bring on new vendors. Only 10% of businesses reported that it was “not at all challenging.” 60 percent of companies said that acquiring a new customer was either extremely difficult or moderately difficult.
Businesses surveyed said fraud was a major concern. This issue has become more serious due to the emergence of generative AI which makes it easier for scammers to create fake companies.
Dori Buckethal, Vice President of Thomson Reuters Risk & Fraud Solutions, told FOX Business: “Organized criminal rings are sophisticated. They’re usually ahead of the curve when it comes to adopting any new technology.”
Buckethal said that “generative AI and machine-learning can replace the manual processes used by criminal organizations to create synthetic identities.”
She continued, “There are many people in call centers who commit this fraud in the past as well as today.” “And, just as we hear in corporations today, these people can be replaced by technology to do it faster and accelerate the rate at which they attack businesses.”
Buckethal says that fraud is a big problem in the business to business market. It accounts for “billions and billions” of dollars of revenue lost each year.
She pointed out that ACFE reports that “5% of all business revenue is lost each year to fraud.”
Businesses are using generative AI for fraud detection, while scammers use it to commit fraud.
ACFE and Thomson Reuters report states that more than 50% of businesses surveyed plan to use AI and machine-learning in their due diligence and vetting processes when onboarding vendors and customers.
Buckethal said to FOX Business, that while AI will reduce the need for compliance personnel in a company, businesses should use these savings to develop technologies to protect their company against fraudsters.
Buckethal explained that technology was not slowing down and companies should invest more in risk management and compliance. Business leaders should think like criminals in order to know where to invest their technology and resources.