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Banks and telecommunications operators must increase collaboration and intelligence sharing to effectively combat the growing threat of artificial intelligence-driven fraud, according to a new report by PricewaterhouseCoopers (PwC).
The report, titled “AI’s Dual Role in Telecom Fraud,” highlights how the rapid adoption of artificial intelligence is transforming the fraud landscape in the telecommunications industry. While the technology enables businesses to improve security systems, it is also being exploited by criminals to automate scams, deploy deepfake impersonations, and scale fraudulent activities more rapidly.
PwC noted that the increasing integration between telecom networks and financial services is expanding the risk surface for digital fraud.
“AI has tremendous potential to drive positive change across sectors, but it also enables fraudsters to create and disseminate scams quickly and at scale,” the report stated.
Telecommunications fraud has long been a global challenge, causing financial losses and reputational damage for operators. PwC estimates that telecom fraud reached approximately $38.95 billion globally in 2023, underscoring the scale of the issue.
In Nigeria, risks within the sector have also increased. Data from the Nigerian Communications Commission (NCC) indicates that Nigerians lost about ₦12.5 billion to telecom-related financial crimes between 2019 and January 2023.
PwC said the expanding convergence between telecommunications services and digital finance—particularly through mobile money platforms and digital banking—has made fraud detection more complex.
“When fraud occurs across interconnected platforms, both telecommunications and financial services providers face regulatory scrutiny and erosion of customer trust,” the report noted.
According to the firm, telecom operators are increasingly becoming a critical part of digital financial infrastructure, making them more attractive targets for cybercriminals seeking to exploit weaknesses across the ecosystem.
Despite these risks, telecom companies possess a key advantage in fraud prevention: access to extensive network and customer data. By leveraging artificial intelligence and advanced analytics, operators can detect suspicious patterns such as irregular call durations, abnormal call frequencies, or unusual activity at odd hours—signals that may indicate fraudulent behaviour.
Machine learning models trained on historical fraud data can also identify subtle anomalies that traditional monitoring systems might miss.
PwC added that some telecom companies are already deploying AI-powered spam detection systems capable of analysing hundreds of behavioural indicators to determine whether a call or message is fraudulent. Real-time analysis of these data streams can enable operators to block scams before they cause significant financial harm.
Artificial intelligence can also support incident response efforts. Through natural language processing and generative AI tools, organisations can convert complex security data into simplified reports for regulators, executives, and compliance teams.
However, PwC emphasised that technology alone will not be sufficient to address the threat. Stronger collaboration between telecom operators, banks, and regulators will be necessary to prevent fraud from spreading across digital platforms.
Telecommunications firms, for example, can provide insights into call patterns and network behaviour that may help banks detect suspicious activities such as SIM-swap fraud attempts. Conversely, financial institutions have developed advanced fraud detection algorithms that could enhance telecom operators’ ability to identify suspicious transactions and network activity.
“By sharing insights and real-time threat intelligence, both sectors can strengthen their individual and collective defences,” PwC said.
The firm cited international collaborations in countries such as the United Kingdom, Singapore, Australia, and the Philippines as examples where coordinated efforts between telecom operators and financial institutions have improved fraud detection and response times.
PwC also stressed the need for continued engagement with regulators, including the Central Bank of Nigeria and the Nigerian Communications Commission, to ensure regulatory frameworks that balance innovation with strong consumer protection measures.
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