Africa is impacted by several issues, one of which is fraud. It impacts plenty of sectors, including finance and commerce, which is the result of the rise in scams and cybercrimes. While there were times when people and organizations were helpless, today, things are different.
On the negative side, fraud has reached its peak. Between April 2022 and April 2023, the Southern African Fraud Prevention Service reported an increase of 356% in impersonation fraud. Interpol also had a say in South Africa’s safety, ranking it as the most cyber-threatened country in Africa.
While it seemed like a lost battle, thanks to the wonders of modern technology, there is a way to combat this. Artificial intelligence brings countless advantages in multiple sectors, and in this situation, it’s a technology that can help combat fraud.
Let’s see how it can help in Africa.
Financial Security
Artificial intelligence is a technology that can be implemented in the financial sector to increase security. Systems relying on AI are designed to monitor and analyze large amounts of data and detect anomalies. Machine learning algorithms can identify unusual patterns, such as spikes in spending or deviations from typical spending, and help minimize the damage.
Pastel Africa has implemented this kind of system, which monitors transactions in real-time. The algorithm analyzes patterns and flags suspicious activities. In most cases, it looks for smaller test transactions that attackers use before launching a bigger attack to steal more money. Identifying these attacks helps prevent significant losses, reducing fraud rates.
Account Takeovers and Cybercrime
Account takeovers are another common type of fraud across Africa that can be mitigated by using AI. Similar to the previous example, these algorithms are implemented to analyze behavior, identify suspicious login attempts, and prevent harm before it occurs.
Africa had the highest number of cyberattacks per week per organization in 2023. This growing concern can be mitigated by implementing artificial intelligence. These algorithms can monitor network traffic and look for anomalies. The goal is to block malicious activities before they become a serious problem.
Password Security
Despite all the advancements in modern technologies, passwords remain the most common way to authenticate an account. Even though things have evolved a lot over the years, some habits remain. According to PIA’s blog post, the most commonly used password these days is “123456” globally, and Africa is no different.
Relying on artificial intelligence can help improve password security and reduce the risks of account takeovers. AI can help with password analysis during the creation process and compare it against databases containing compromised or commonly used passwords. In addition, these algorithms can implement behavioral authentication. They would monitor typing speeds or pointer movement patterns to verify a user’s identity.
Artificial intelligence can also be utilized to implement password-less login. Even though passwords are here to stay, the algorithm will eventually be able to decide if a login attempt is from a real person or an attacker. This should significantly reduce vulnerabilities and enhance user convenience.
Combating Organized Crime
AI is the type of technology that can help more than safeguard your accounts. Law enforcement agencies can rely on predictive tools to analyze crime patterns. This can be a crucial aspect that should help anticipate criminal activities and assist in preventing them. Some systems are already in place. The VumaCam system is already in operation in Johannesburg, and it utilizes license plate recognition technology to help track stolen vehicles.
Wildlife poaching and mining are still massive problems throughout Africa, and artificial intelligence can help with them. Systems like the Africa Regional Data Cube (ARDC) rely on satellite images and observation data to monitor changes in land over time. This technology has already been implemented in Ghana, where agencies can track illegal mining operations.
Support for Anti-Corruption Efforts
Corruption remains a massive issue for many countries in Africa, significantly impacting their development. Artificial intelligence can be implemented in multiple ways to help combat corruption. Like most approaches, this technology analyzes large datasets and processes, which can be too complicated for manual review.
Tax authorities can leverage AI to detect tax evasion. This is achieved by comparing financial data with the reported incomes. By automating the process, the authorities can improve revenue collection and minimize the chances of corruption. It’s a similar situation with public procurement processes or financial records. Artificial intelligence can compare and find irregularities that usually indicate bribery and help eliminate it.
Insurance Fraud Detection
Insurance fraud is common in Africa. In 2022, South Africa was a victim of R77 million in insurance fraud. That said, certain measures helped the country prevent over R1.1 billion in fraud. One of these measures included implementing artificial intelligence, which has several advantages.
The first and most important is that the algorithm can monitor changes in behavior patterns, predict fraudulent transactions, and prevent them before the claim is completed. Implementing artificial intelligence in this sector can also drastically reduce the investigation time. Overall, the goal is to improve efficiency and reduce false positives.
Challenges of implementing AI
On paper, implementing artificial intelligence in multiple sectors across Africa can help reduce fraud, but it’s not as simple as it seems. Multiple aspects may prevent the full utilization of this technology.
One of the biggest challenges is the availability and quality of data. For AI to do its job efficiently, it needs as much data as possible, and it needs to be correct. Despite living in a technologically advanced era, there are still institutions across Africa that lack the infrastructure. This limits the amount of data the algorithms can access, which can lead to poor performance and results.
The second challenge of full AI deployment across the continent is underdeveloped areas. While this technology would work well in countries like Morocco or South Africa, others, such as Ethiopia or Liberia, aren’t technologically advanced enough for this kind of adoption.
Ethical concerns about AI and access to sensitive data are popular topics worldwide, and the same applies to Africa. Data privacy and transparency are issues, especially when you factor in how much data the algorithm will have access to. Algorithmic bias is also something and can lead to unfair decisions, causing all sorts of additional problems.
Conclusion
As a technology, artificial intelligence can bring many advantages to multiple sectors in multiple parts of the world. Implementing it means that many risks can be minimized or eliminated, ensuring things run smoothly. Considering the current situation in Africa, AI can help with fraud.
While there are plenty of ways in which artificial intelligence can help, some obstacles still need to be overcome. The future of fraud detection and combat lies in the proper implementation of artificial intelligence, and the sooner African countries can implement it, the sooner they’ll see the benefits.
