The conundrum of AI in the fight against fraud in Latin America

In an increasingly connected and virtual world, technology has become a double-edged sword, since while it allows the creation of new tools to prevent fraud and corruption, it also provides criminals with new ways to commit crimes. Now, the question that Latin American experts ask themselves is how the future will affect the development of the artificial intelligence (AI)

“Technology is like a knife,” Juan Ignacio Ruiz, president of the International Association for Cooperation in Fraud Prevention (ICPF), told AFP, since depending on who uses it, it can be used to “eat a good steak or harm a person.”

Ruiz and other experts shared their experiences with the AFP in the framework of the VI Latin American Congress for the Prevention of Organizational Fraud (CLAPFO) in the Costa Rican city of Heredia, neighboring San José.

Fraud is currently a “global problem” costing businesses $3.6 billion, according to the 2022 Report to the Nations from the Association of Fraud Certifiers (ACFE), the world’s largest anti-fraud association.

The NGO Transparency International confirms in its Corruption Perception Index 2022 that the levels “have not changed” during the last decade in 95% of the 180 countries analyzed.

new typologies

The Costa Rican company specialized in fraud prevention Capacita is committed to training and technology as “the most powerful weapons to combat corruption,” according to its director, André Barrantes.

“(Fraud) can really have a direct impact on the growth of the organization and even put its finances at risk. At the public sector level, these are schools, hospitals, we are mortgaging our society for this type of cost of fraud and corruption,” Barrantes told AFP.

It stands out that, according to data from the ACFE, each year fraud consumes 5% of the income of companies, which could reduce a third of their profits.

Eastern Europe, Central and Western Asia, and Latin America and the Caribbean are the regions where fraud generates the most losses for companies, according to the ACFE.

Barrantes proposes taking advantage of technology to prevent, detect and report fraud, as well as anticipate the development of artificial intelligence to project possible applications.

“AI is going to imply new fraud risks because there are going to be new typologies,” he warns, “but not everything is bad.”

According to Barrantes, “artificial intelligence, like technology at the moment, is becoming an ally to be able to combat it.”

“Technology should be seen as an ally. Now we are in an era of artificial intelligence where we are already seeing that certain threats are being promoted or enabled with the use of these intelligence systems”, warns Julio Jolly, director of the Panamanian consultancy Global Advisory Solutions.

“There are no borders”

AI emerged as a technology whose limits have yet to be determined and its applications, for better or worse, are in full development.

“We are seeing more issues of intelligence, support on the internet, interaction of artificial intelligence in the cognitive part, where there is more collaboration between human beings and machines. This implies that if we are going to continue promoting it, we must not rule out the issue of minimizing risks”, indicates Jolly.

The expert believes that AI can both help to commit fraud and prevent it, which is why training in programming and technological education is important to keep up with evolution.

“It puts us at a great disadvantage before criminals because there are no longer borders and from anywhere in the world, governments, companies, people can be highly vulnerable,” says Jolly.