Artificial Intelligence (AI) is a powerful tool. But in the world of fraud prevention, it’s only as effective as the expertise guiding it. I’ve spent over two decades in fraud detection, and one thing has always been clear: technology alone cannot replace the people behind vital government programs. Instead, it should act as a force multiplier, amplifying the capabilities of fraud fighters like you and me.
Here’s the reality: while we’re debating how to use AI ethically, the bad guys are already miles ahead. They’re weaponizing advanced data analytics, leveraging AI, and stealing sensitive information to exploit government programs. They’re innovating—but with ill intent. The good news? We can fight fire with fire.
Why SME-Led AI Matters
AI can process mountains of data in seconds, spot patterns invisible to the human eye, and help investigators prioritize their work. But the key to making it effective lies in pairing it with subject matter expertise (SME).
Here’s why:
- Context is everything. AI might flag anomalies, but without expert interpretation, we risk chasing false positives—or worse, missing the real threats.
- Programs are nuanced. Government benefits, for example, are complex. Only those who deeply understand these systems can train AI to detect fraud while ensuring eligible families and individuals aren’t unfairly denied assistance.
- Adaptation beats automation. Fraud schemes evolve quickly, and experts are essential for teaching AI to adapt and spot new tactics as they emerge.
When SMEs lead, AI becomes a collaborator rather than a black box. It triages cases, prioritizes high-risk entities, and frees up investigators to focus on the most complex problems—delivering the best outcomes with the resources available.
The Stakes Are Higher Than Ever
Fraud isn’t just a theoretical problem—it’s costing taxpayers billions annually. Recent data from the Government Accountability Office (GAO) revealed improper payments across federal programs totaled $247 billion in 2022 alone.
The bad actors behind these schemes are more sophisticated than ever, using technology to scale their operations. Take the 2023 case of fraudsters exploiting pandemic-era relief programs: they created fake identities, automated application processes, and even infiltrated government systems to siphon funds meant for struggling Americans.
If they’re using AI to defraud, we must use it to defend. But the technology must be powered by human expertise to ensure it works for good.
The Force Multiplier in Action
When AI is paired with human expertise, the results are transformative:
- Case Prioritization: AI can sift through millions of transactions and flag high-risk activities, allowing investigators to focus on the most pressing cases.
- Criminal Network Detection: By analyzing connections between entities, AI helps map out fraud rings that would otherwise go undetected.
- Resource Optimization: SMEs can guide AI to allocate investigative resources where they’ll have the most impact, maximizing program integrity while minimizing waste.
This isn’t just theoretical. In my work with fraud prevention units, we’ve seen firsthand how technology pays for itself—and then some. By rooting out fraud early, we’ve saved millions of dollars and ensured benefits go to the people who truly need them.
Let’s Flip the Script
Fraudsters aren’t waiting for us to catch up. They’re already using the most advanced tools at their disposal. But we have something they don’t: the expertise and integrity of those who understand these programs inside and out.
When we combine that expertise with the power of AI, we’re not just defending against fraud—we’re outpacing it. We’re protecting vital programs, safeguarding taxpayer dollars, and ensuring trust in the systems that millions of Americans rely on.
This is a pivotal moment in the fight against fraud. Let’s embrace the possibilities of SME-led AI, not as a replacement for human ingenuity, but as its most powerful ally.
Sources
- Government Accountability Office, Improper Payments Report, 2022
- Pandemic Relief Fraud in 2023: How Technology Played a Role
