PWC Urges Stronger Collaboration To Tackle Fraud

PricewaterhouseCoopers (PwC) has called for stronger collaboration among deposit money banks, the Central Bank of Nigeria (CBN), the Nigerian Communications Commission (NCC), and telecommunications operators to combat the growing threat of fraud in Nigeria’s digital ecosystem.

PwC, in its latest report titled “AI’s Dual Role in Telecom Fraud,” warned that the increasing convergence of financial services and telecommunications has created new vulnerabilities that fraudsters are exploiting at scale, particularly with the rise of artificial intelligence tools.

According to the firm, the impact of fraud on telecommunications companies has become far-reaching, resulting in financial losses, reputational damage, and compliance challenges.

It disclosed that global telecom fraud was estimated at $38.95 billion in 2023, while in Nigeria, data from the NCC showed that citizens lost about N12.5 billion to telecom-related financial crimes between 2019 and January 2023.

Citing its 2022 Global Crime Survey, PWC said nearly two-thirds of Technology, Media and Telecommunications companies experienced fraud, the highest rate across all industries, with about half of such incidents linked to cybercrime.

According to the report, the rapid adoption of AI is expected to further reshape the fraud landscape, as criminals increasingly deploy the technology to create more sophisticated and convincing scams. “AI enables fraudsters to create and disseminate scams quickly and at scale, making them more convincing and difficult to detect,” the report stated.

The report highlighted that the intersection between telecom operators and financial services providers has amplified risks, particularly in Nigeria where digital banking adoption continues to rise. It noted that about 59 per cent of e-banking customers in the country have experienced scams, placing additional responsibility on telecom operators as critical infrastructure providers for digital financial services.

“When fraud occurs across these interconnected platforms, both telecommunications and financial services providers experience regulatory scrutiny and customer trust erosion, creating cascading impacts across the digital ecosystem,” PwC stated.

To address these challenges, PwC stressed the need for deeper collaboration across sectors to tackle fraud effectively, noting that existing partnerships such as USSD banking already demonstrate the potential of joint efforts.

The report explained that telecom operators’ fraud detection systems, which monitor call data and network activity, can be leveraged by financial institutions to verify identities, detect SIM swap fraud, and prevent unauthorised access to accounts. Similarly, banks’ advanced anti-fraud algorithms could help telecom operators strengthen their systems for identifying suspicious behaviour.

PwC emphasised that sharing insights and real-time threat intelligence would enable faster and more coordinated responses to emerging risks. “Telecom operators possess sophisticated fraud detection systems designed to monitor call data and network activity.

“These tools can be adapted to help financial institutions verify user identities, detect SIM swap fraud, and prevent unauthorised access to accounts. On the other hand, banks have developed advanced anti-fraud algorithms that could inspire telcos to enhance their own systems for detecting suspicious behaviour across mobile networks.

“By sharing insights, both sectors can strengthen their individual and collective defences. For instance, exchanging knowledge on internal fraud prevention policies and real-time threat intelligence could lead to faster, more coordinated responses to emerging threats, similar to initiatives in the UK, Philippines, Singapore, and Australia.

“To make this collaboration effective, there must also be stronger engagement with regulators such as the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN). Improved communication between industry players and government bodies can accelerate the development of clear, responsive regulations that support innovation while safeguarding consumers.” It stated.