Banks and telecommunications companies must deepen their collaboration and share intelligence to combat the growing threat of artificial intelligence-driven fraud, according to a new report from Pricewaterhouse Coopers.
The professional services firm noted that the rapid adoption of AI is reshaping the fraud landscape in the telecommunications sector, enabling criminals to automate scams, impersonate victims through deepfake technologies, and scale fraudulent schemes with unprecedented speed.
The 16-page report, titled ‘AI’s Dual Role in Telecom Fraud’, noted that while AI is helping fraudsters launch more sophisticated attacks, the same technology can also serve as a powerful defensive tool for telecom operators and financial institutions.
“AI has tremendous potential to drive positive change across sectors, but it also enables fraudsters to create and disseminate scams quickly and at scale,” PwC said, warning that the expanding digital ecosystem linking telecom networks and financial services is creating new vulnerabilities.
Fraud has long posed a significant challenge for telecom operators worldwide, resulting in financial losses, reputational damage, and regulatory scrutiny. Globally, telecom fraud was estimated at approximately $38.95 bn in 2023, highlighting the scale of the problem. In Nigeria, the sector has also faced rising risks.
According to the Nigerian Communications Commission, citizens lost approximately N12.5 bn to telecom-related financial crimes between 2019 and January 2023.
PwC said the growing integration between telecom networks and financial services, such as mobile money platforms and digital banking, is further complicating the fraud landscape.
“When fraud occurs across interconnected platforms, both telecommunications and financial services providers face regulatory scrutiny and erosion of customer trust,” the report said.
The firm added that telecom operators are increasingly becoming critical infrastructure for digital financial services, exposing them to greater risk as criminals target the ecosystem. Despite these risks, PwC said telecom companies have a unique advantage in the fight against fraud due to the vast amount of network and customer data they possess.
By deploying advanced AI systems, telcos can detect suspicious activity patterns, flag unusual call behaviour, and identify fraudulent transactions in real time. For example, AI-driven pattern recognition can analyse large datasets to detect irregular call durations, unusual call frequencies, or activity occurring at odd hours, indicators that may signal fraudulent activity. Machine learning models trained on historical fraud cases can also help identify subtle warning signs that traditional detection systems might miss.
PwC noted that some telecom operators are already deploying AI-powered spam detection tools capable of analysing hundreds of behavioural parameters to determine whether a message is fraudulent. Real-time data analysis, the firm added, can allow companies to block fraudulent activities before they cause major financial damage.
Beyond fraud detection, AI can also help organisations respond more effectively to incidents. Using natural language processing, generative AI systems can convert technical security data into simplified reports tailored for regulators, executives, and compliance officers.
However, PwC said technology alone will not be enough to curb the growing threat. The firm stressed that stronger collaboration between telecom operators, financial institutions, and regulators is essential to prevent fraud from spreading across digital platforms. Telecom companies, it said, possess sophisticated tools capable of monitoring call patterns and network behaviour, which could help banks detect suspicious activities such as SIM swap attempts.
At the same time, banks have developed advanced fraud detection algorithms that could enhance telecom operators’ ability to identify suspicious activity across their networks. “By sharing insights and real-time threat intelligence, both sectors can strengthen their individual and collective defences,” PwC said.
The firm cited international examples where such collaboration has improved fraud detection and response times, including initiatives in the United Kingdom, Singapore, Australia, and the Philippines. PwC also emphasised the importance of closer engagement with regulators such as the Central Bank of Nigeria and the Nigerian Communications Commission to ensure clear and responsive regulatory frameworks that support innovation while protecting consumers.
