Emerging technologies such as machine learning and artificial intelligence (AI) are becoming increasingly important in the banking industry as a new wave of consumers join the financial system, pushing demand for credit, loans, and remittances.
This is according to Jason Lane-Sellers, director of fraud and identity at LexisNexis Risk Solutions for Europe, the Middle East, and Africa, who spoke with ITWeb Africa about how emerging identities are affecting banks' identity verification systems and how financial institutions can combat synthetic fraud while also expanding financial inclusion for real customers.
According to Lane-Sellers, banks may use a number of fraud prevention techniques that won't disrupt the client journey or experience.
He explained: “Technologies like digital persona validation and behavioural intelligence analysis, as well as digital identity validation, can all be utilised across different stages of interaction.
“These tools should leverage machine learning and AI to perform real time analysis and therefore preventative capabilities. It takes AI-powered anti-fraud tools to defend against emerging AI-driven fraud attacks.”
He went on to note that document authentication and biometric verification solutions, which help authorise trusted transactions while identifying deep-fakes and counterfeit documents, are becoming more prevalent around the world.
“These tools employ AI models and a deep neural network that not only fully automate authentication of ID documents and verification of ID holders’ identities within seconds, but the models are constantly learning and updating in real time,” he said.
Lane-Sellers believes that digital identity programmes that use biometrics can be an effective method of user authentication and validation for digital service users, as seen elsewhere around the world; however, he cautions that when introducing new systems, it is critical to understand that on-boarding is one of the most targeted fraud attack areas.
He elaborated: “It’s vital to employ strong identity verification and authentication controls not only at sign up, but at every touchpoint throughout the customer journey.
“Once digital identities are established, the focus needs to be on monitoring for account takeover or user manipulation. Fraudsters can deploy a range of tactics, including criminals targeting the consumer themselves and stealing their details, account takeover or user social engineering are the rising threats.”
The fraud expert also advocated for education and simplification for generations of seniors and individuals who have previously been excluded from traditional financial systems.
Lane-Sellers emphasised that, as technology and digital services have evolved, the consumer has become the primary target for fraudsters, whether through manipulation, scams, or account take-overs.
“Education and simplification are some of the main areas of focus for organisations assisting their consumers. However, a low-friction journey is vital to encouraging utilisation, so they need to ensure appropriate fraud prevention controls are in place to protect the consumer from manipulation,” he concluded.
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