Despite investments, enlightenment, and various regulations aimed at slowing down telecom-related frauds, data showed that Nigerians lost approximately N12.5 billion to scams within four years (2019 to January 2023).

Within the period, the global community suffered over $38.95 billion in losses.
This was revealed by PwC, which quoted the Nigerian Communications Commission (NCC) for the country’s figure.

It called on telecom companies in Nigeria to invest in sophisticated anti-fraud tools that employ machine learning and artificial intelligence (AI) to enhance detection and response times while conducting regular audits to ensure that systems remain up-to-date and effective.

PwC, in a 16-page document on AI fraud in the telecom sector, noted the dual role of AI as a threat and shield, highlighting the need for Nigerian telecom operators to adopt AI deliberately and strategically.

Some of these frauds listed by PwC include SIM box, SMS phishing, SIM swap fraud, subscription fraud, scam calls, and international revenue share fraud.

According to PwC, the telecommunications industry faces diverse fraud threats, most of which are cyber-enabled. PwC’s 2022 Global Crime Survey found that nearly two-thirds of technology, media, and telecommunications companies experienced fraud, the highest rate across all industries, with half of these incidents being cybercrimes.

The firm noted that the growing adoption of AI will likely reshape this landscape. It said the intersection with financial services amplifies these risks for telecom operators, who enable digital payments and banking partnerships.

PwC said in Nigeria, where 59 per cent of e-banking customers have fallen victim to scams, telecommunications providers may face mounting pressure as key infrastructure for digital financial services.
It said 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.

It called for a deeper understanding of how technological disruption is transforming fraud risks today and how those risks may evolve in the future.

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 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.

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.