Innovation update

Building an AI-focused anti-fraud company

Artificial intelligence (AI) is changing how businesses run — especially in anti-fraud and compliance. Here we describe how to build an AI-focused, anti-fraud technology company and what mindsets, strategies and tactics work well for organizations and entrepreneurs.

With billions of dollars stolen from U.S. pandemic-relief programs, work has only just begun in tracking down the fraudsters who perpetrated such crimes and finding ways to prevent this kind of wrongdoing in future crises. Artificial intelligence (AI) is making that job easier and being adopted more and more by U.S. federal agencies and other organizations in their fight against fraud.

The Pandemic Response Accounting Committee (PRAC), a U.S. oversight agency for the emergency spending bills tied to the health crisis, has been using AI to pore over millions of records in search of fraud patterns. In one case, the technology reportedly helped PRAC track down a phone number of a Houston gas station that applied for 150 loans under the COVID programs, information PRAC quickly sent to federal agents. (See “ 'Biggest fraud in a generation': The looting of the Covid relief plan known as PPP,” by Ken Dilanian and Laura Strickler, NBC News, Coronavirus, March 28, 2022, and “Using AI and machine learning to reduce government fraud,” by Darrell M. West, The Brookings Institution, Sept. 10, 2021.)

Over the past 25 years, I’ve seen technology change a lot — and nothing has affected our profession as much as AI. In fact, the technological advances in AI inspired me to move from a consultant (who advises, then implements other people’s technology) to recently becoming the CEO of a research-driven, AI-focused, anti-fraud prevention and detection software company.

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