Fraud tactics are constantly evolving, as are the tactics to prevent fraudulent activity in the banking sector. Passports, for instance, employ sophisticated techniques to prevent identity fraud. This means that they are often used for the know your customer (KYC) processes that financial service providers need to adhere to in order to on-board new customers. Furthermore, these processes are becoming more stringent under new proposed legislation. The EU’s AML4.1 directive for example expands the scope of regulated organisations and dramatically increases the penalties for non-compliance.
Unfortunately a ubiquitous, trusted document such as a passport will attract attention from fraudsters looking to create a fraudulent credential that will not just pass visual inspection, but a careful, rigorous one. The number of lost/stolen passports in the EU alone has doubled from 16m in 2010 to 34m today.
To combat the risk of fraud the techniques banks need to use to reveal fakes must evolve. It must acknowledge these two things:
Forward looking banks are using mobile capture and artificial intelligence (AI) to not just acquire and identify falsified documents, but also adapt to changing fraud techniques and cut down on false positives. In this context, consumers would be asked to submit a photo of a passport or other document through a digital channel – like mobile - rather than ask, often under skilled, tellers at branches to verify documents. Using AI banks can distil 20 years of experience and the combined expertise of cross-border agencies, governmental organisations and law enforcement into its fraud detection measures.
This proposed panel topic will look at how cloud-based image recognition and AI based machine learning can help financial institutions cope with the demands of impatient customers, new KYC legislation, and the threat of fraud.
Key Takeaways:
