The Role of Generative Artificial Intelligence in E-Commerce Fraud Detection and Prevention

Abstract

This study explores the transformational potential of generative artificial intelligence (GAI) in commerce fraud detection and prevention within e-commerce, highlighting the growing risk of fraudulent activities due to the rise of online transactions and data-driven activities in various industries, including finance, e-commerce, and healthcare. Conventional rule-based systems often fail to keep up with evolving fraud strategies, whereas GAI, employing tools like GANs and variational autoencoders, can generate synthetic yet realistic data to uncover sophisticated fraud schemes. The chapter presents successful real-world examples of GAI applications, emphasizing the need for ethical considerations, such as privacy and bias prevention, to ensure responsible AI implementation. The study concludes that GAI offers a potent, adaptive, and data-driven strategy to combat fraud, promising a safer digital environment if ethical implications are carefully managed.