SAT MAR 21 2026-theGBJournal| A new report by PwC- AI’s dual role in telecom fraud-, spotlights the growing complexity of fraud in the telecommunications sector, driven by the rapid evolution of artificial intelligence.
The study underscores AI’s dual role—empowering fraudsters with more sophisticated tools while simultaneously equipping operators with advanced defenses.
As digital adoption accelerates globally, telecom networks are increasingly becoming prime targets for highly coordinated, AI-enabled attacks.
According to the report, fraud remains a persistent challenge in telecoms, and the growing adoption of AI by fraudsters is amplifying the frequency and impact of fraud.
In Nigeria, where telecoms act as a key gateway to financial services through USSD and some are moving into fintech, these evolving risks place added pressure on operators.
In 2023, global telecom fraud was estimated at $38.95bn. Additionally, in Nigeria, the report highlights a particularly urgent challenge. With one of Africa’s largest and fastest-growing telecom markets, the country faces heightened exposure to fraud risks amid expanding mobile and digital financial services.
The Nigerian Communications Commission (NCC) reported citizens lost about N12.5 billion to telecom-related financial crimes from 2019 to January 2023, underscoring the scale and persistence of this threat.
Cybercriminals are equally leveraging AI to automate scams, mimic customer behavior, and exploit vulnerabilities at unprecedented speed and scale.
From SIM swap fraud, SMS phishing (Smishing) to Subscription fraud, Scam calls campaigns, synthetic identity creation and International Revenue Share Fraud (IRSF), the threat landscape is expanding rapidly, according to the report.
At the same time, telecom operators are deploying AI-driven solutions to counter these threats, using predictive analytics, anomaly detection, and real-time monitoring to strengthen security frameworks.
PwC notes that while these technologies are improving resilience, the race between attackers and defenders remains tightly contested.
”In the telecommunications sector, where fraud is already a significant challenge, business leaders can rethink their perception of AI—rather than viewing AI as an inherent threat, telcos can harness its power to detect and prevent fraud,” PwC suggested.
PwC suggests also that with their vast data resources, they can train AI models to identify and mitigate risks, effectively “fighting fire with fire.” This strong data foundation also enables telcos to utilise GenAI for:
-Pattern recognition: Use AI to analyse patterns in data. These patterns can help identify characteristics commonly associated with fraud, such as unusual call frequencies, short call durations, or calls made at odd hours.
-Machine learning models: Develop and train machine learning models on datasets containing examples of both legitimate and fraudulent activities.
-Real-time analysis: Implement AI systems capable of real-time data analysis.
-Incident reporting: By leveraging natural language processing, GenAI can transform technical data into easily understandable content for non-technical stakeholders.
In the event of a major business disruption, GenAI can quickly generate targeted reports for different roles, such as focusing on regulatory implications for the chief compliance officer.
Additionally, AI can create templates for comparing incidents to industry standards and regulations, which is crucial in an era of increased regulatory scrutiny on cyber-breach reporting.
PwC made some key recommendations as well:
-Perform periodic fraud assessment Telcos should conduct regular audits to ensure that systems remain up-todate and effective.
This includes reviewing your AI models, integrating new data, and refining algorithms to counter evolving fraud tactics. Routine risk analysis helps identify new and emerging threats, enabling telcos to implement necessary controls to mitigate risks
-Upskill your workforce
Establish ongoing training programmes tailored for both the fraud team and customer service agents.
-Educate customers on fraud risks
Educating customers is crucial for effective telecommunications fraud prevention, as many scams rely on social engineering tactics that manipulate individuals into sharing personal information.
-Invest in advanced anti-fraud tools
Telecom companies should invest in sophisticated anti-fraud tools that employ machine learning and AI to enhance detection and response times.
Investment in AI-powered fraud management systems is rising, but so too is the ingenuity of cybercriminal networks.
Adopt responsible AI practices
Telecom companies should adopt responsible AI practices to ensure that fraud detection systems are transparent, ethical, and unbiased.
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