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HomeTopicsLatin AmericaThe Impact of AI on Fraud Prevention and Detection in Latin America

The Impact of AI on Fraud Prevention and Detection in Latin America

In an increasingly connected and virtual world, technology has become a double-edged sword. While it allows the creation of new tools to prevent fraud and corruption, it also provides criminals with new ways to commit crimes.

The question being asked by Latin American experts is how the development of artificial intelligence (AI) will affect the future. “Technology is like a knife,” says Juan Ignacio Ruiz, president of the International Association for Cooperation in Fraud Prevention (ICPF), “because 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 at the VI Latin American Congress for the Prevention of Organizational Fraud (CLAPFO) in the Costa Rican city of Heredia, near San José.

Fraud is currently a “global problem” with a cost of 3.6 billion dollars in the corporate sphere, according to the Report to the Nations 2022 of the Association of Certified Fraud Examiners (ACFE), the world’s largest anti-fraud association. The NGO Transparency International confirms in its Corruption Perceptions Index 2022 that levels “have not changed” over the last decade in 95% of the 180 countries analyzed.

The Costa Rican company specializing in fraud prevention Capacita is betting on training and technology as “the most powerful weapons to fight corruption,” according to its director, André Barrantes. “(Fraud) can really have a direct impact on what is involved in the growth of the organization and even put its finances at risk. At the public sector level, this is schools, hospitals, we are mortgaging our society for this kind of cost of fraud and corruption,” said Barrantes.

He points out that, according to ACFE data, each year fraud consumes 5% of companies’ revenues, which could reduce their profits by as much as a third. 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 getting ahead of 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 it’s not all bad.” According to Barrantes, “artificial intelligence, like technology at the moment, is becoming an ally to be able to combat it.”

Julio Jolly, director of the Panamanian consulting firm Global Advisory Solutions, says that technology must be seen as an investment and not as an expense. “Technology should be seen as an ally. We are now in an era of artificial intelligence where we are already seeing that certain threats are being enhanced or enabled by the use of these intelligence systems,” warns Jolly.

AI burst onto the scene as a technology whose boundaries are yet to be determined, and its applications, for better or worse, are in full swing. “We are seeing more intelligence issues, internet backup, artificial intelligence interaction on the cognitive side, where there is more collaboration between humans and machines.

This means that if we are going to continue promoting it, we should not discard the issue of minimizing risks,” says Jolly. The expert considers that AI can both help to make fraud and prevent it, which is why training in programming and technological education is important to keep up with the pace of evolution.

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

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