Intelligent Procurement Fraud Is Coming.

Intelligent Procurement Fraud Is Coming.

November 30, 2021
Data, Procurement

Are you ready for artificial intelligence fraud?

We’ve already written about the almost magical capabilities of artificial intelligence here.

We’re using it to augment millions of documents. We’re using it every day, creating cleansed, enhanced data that would take humans hundreds of years to process manually.

The latest natural language processing algorithms are completely changing our relationship with text. We can analyse and recreate text better than ever before.

We can use AI to spot fraud, but that AI can also be used to conduct fraud too.

At its most basic, AI fraud will be a sort of supercharged plagiarism. Imagine a consultancy given the task of creating a report, and submitting something that was written in 10 seconds by an algorithm that has been trained on the endless flow of positional papers, white papers and other corporate content. Or perhaps you’re buying a support service that charges for human operators, which in fact turn out to be algorithms that got used when service demand was high.

In a more sophisticated use, AI could be used to obfuscate and hide the activities of a cartel. For a cartel to function it needs to submit losing bids alongside the pre-chosen winning bid. In the past those bids had to be written by hand and cartels were sometimes discovered by lazy copy/paste activities when submitting losing bids. Now a losing bid can be created by an algorithm that has been trained on old bids. Old bids can simply be rephrased and rehashed by the algorithm, creating fresh, unique content for bidders who want a cheap way to produce bids but don’t want to win.

What about colluding with buyers? That becomes easier when AI can ingest thousands of tender specifications and then write a spec that is constructed to be won by a specific supplier. This might seem fanciful, but given the incentives and the difficulty of detecting this type of fraud, it would be foolish to assume that it won’t happen.

Artificial text is coming and buyers need to be ready for the changes it will bring.

Talk to us about your data needs, our data services and our procurement research capabilities.

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