Futurae Technologies AG’s Post

The Evolving FinTech Landscape & AI's Role in Fraud Prevention 🚨 (Insights from ComplyAdvantage's "State of Financial Crime 2024" Report) Attention FinTech Enthusiasts! 🌍 A groundbreaking report by ComplyAdvantage, a leader in AI-driven fraud and AML risk detection, has just surfaced, unveiling the new face of financial crime in 2024. Let’s dive into the details: 1️⃣ Dual Role of AI: AI is a powerful tool for both criminals and financial institutions. While it aids in advanced fraud detection, it also presents new challenges like deepfakes and AI-generated malware. 2️⃣ Rising Investment in AI Defense: With 86% of firms boosting their tech defences, AI's role in preventing financial crime is growing rapidly. 3️⃣ The Need for Explainability: Transparency in AI decision-making is key, yet only 53% of firms prioritise this. There's a significant opportunity to build consumer trust by explaining how AI works in fraud prevention. 4️⃣ Consumer Attitudes Shift: 65% of consumers are open to banks sharing transaction data to combat fraud, indicating a growing acceptance of innovative, AI-driven solutions. 5️⃣ Persistent Threat of Payment Fraud: Digital payment fraud remains high, particularly affecting millennials, reflecting the urgency to adopt more sophisticated fraud prevention methods. 6️⃣ 'Friendly Fraud' – A Hidden Challenge: Surprisingly, many consumers engage in 'friendly fraud', highlighting the need for more nuanced fraud detection approaches. 🔑 Key Message: As we progress through 2024, AI's role in combating financial crime is undeniable. For FinTech, the focus should be on advancing AI strategies, enhancing transparency, and aligning with changing consumer attitudes. Your thoughts: How can AI reshape fraud prevention in FinTech? Discuss below! ⬇️ Read more here: https://lnkd.in/en73ZbSF #FinTech #AI #FinancialCrime #CyberSecurity #FraudPrevention #DigitalPayments #ConsumerTrust

This one's a biggie. We've been discussing the idea of "surface area" lately in fraud as it relates to the holistic risk assessment of an app/txn/identity. This picture perfectly illustrates a truly sophisticated ML model's ability to "shrink" the surface area and quickly highlight the differences (risk vectors) in a transaction. Really excited about what Sigma v4 is poised to do for the financial ecosystem.

I don’t say this lightly.  Our new release of the Sigma V4 Fraud Engine is GAME CHANGING for companies losing millions of dollars annually from digital account opening fraud.  I’m talking to the banks, fintechs, marketplaces, governments, gaming companies…  Pay attention. Here’s the performance data on Sigma Identity V4: 🔹 Capturing up to 99% of identity fraud in the riskiest 5% of users, compared to just 37% by competitors at the same review rate 🔹 Reducing false positives by more than 40% over Socure's Sigma ID v3 🔹 Delivering an average 20x ROI for customer's from increased revenue/false positive reduction, fraud loss reduction, and lower manual reviews How did we do it? 10 years of making huge investments across 3 key areas: 1️⃣ Digital Signal creates a robust digital fingerprint of each customer, inclusive of devices and their OS, browser languages, geolocations, and relationship to multiple identities. 2️⃣ Entity Profiler allows us to see an identity from its inception in the digital economy, assessing every historical transactional, digital and relational data point to make up-to-the-second risk decisions. 3️⃣ Integrated Anomaly Detection is a new model that assesses identity behavioral pattern differences at the company, industry, and financial network level and allows us to identify thousands of risk-indicating variables. Let’s use an analogy.  Think of fighting identity fraud like playing a giant game of 'Spot the Difference' where most of the images are identical copies of a normal, everyday scene. The fraudulent activity is like one subtle, but crucial difference hidden in one of these images. It's hard to find because it blends in so well. However, with the right tools, this one different detail lights up or gets highlighted, making it easy to spot. This saves the fraud analysts, who are like players in this game, a lot of time and effort as they don't have to scrutinize every single part of the picture to find the anomaly #fraud #ai #banks #fintech

🚨𝗛𝗼𝘄 𝗔𝗜 𝗶𝘀 𝗖𝗵𝗮𝗻𝗴𝗶𝗻𝗴 𝘁𝗵𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗖𝗿𝗶𝗺𝗲 𝗟𝗮𝗻𝗱𝘀𝗰𝗮𝗽𝗲 🚨 𝘍𝘪𝘯𝘛𝘦𝘤𝘩’𝘴 recent article discusses the criminal use of Artificial Intelligence and how it is becoming one of the most Serious Emerging Fraud Challenges. Here are the main takeaways from the article:  𝟭) 𝗔𝗜 𝗶𝘀 𝗯𝗲𝗶𝗻𝗴 𝘂𝘁𝗶𝗹𝗶𝘀𝗲𝗱 𝗯𝘆 𝗯𝗼𝘁𝗵 𝗰𝗿𝗶𝗺𝗶𝗻𝗮𝗹𝘀 – 𝘄𝗵𝗼 𝗮𝗿𝗲 𝘂𝘀𝗶𝗻𝗴 𝗶𝘁 𝘁𝗼 𝗱𝗲𝗳𝗿𝗮𝘂𝗱 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀 – 𝗮𝗻𝗱 𝗶𝗻𝘀𝘁𝗶𝘁𝘂𝘁𝗶𝗼𝗻𝘀, 𝘄𝗵𝗼 𝗮𝗿𝗲 𝘂𝘀𝗶𝗻𝗴 𝗶𝘁 𝘁𝗼 𝘀𝘁𝗮𝘆 𝗮𝗵𝗲𝗮𝗱 𝗼𝗳 𝗳𝗿𝗮𝘂𝗱𝘀𝘁𝗲𝗿𝘀 𝗮𝗻𝗱 𝗱𝗲𝗳𝗲𝗻𝗱 𝘁𝗵𝗲𝗶𝗿 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿𝘀. Research carried out by 𝘊𝘰𝘮𝘱𝘭𝘺𝘈𝘥𝘷𝘢𝘯𝘵𝘢𝘨𝘦 has identified criminal use of artificial intelligence as one the most serious emerging fraud challenges while revealing that most financial institutions are investing in the necessary technology – including AI – to combat this growing threat. 𝟮) 𝗧𝗵𝗲𝗿𝗲 𝗶𝘀 𝗮 𝘁𝗿𝗲𝗺𝗲𝗻𝗱𝗼𝘂𝘀 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆 𝗳𝗼𝗿 𝗯𝗮𝗻𝗸𝘀 𝘁𝗼 𝘀𝗵𝗼𝘄 𝗰𝗼𝗻𝘀𝘂𝗺𝗲𝗿𝘀 𝗵𝗼𝘄 𝘁𝗵𝗲𝘀𝗲 𝗻𝗲𝘄 𝘁𝗲𝗰𝗵𝗻𝗼𝗹𝗼𝗴𝗶𝗲𝘀 𝗮𝗻𝗱 𝗽𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 𝗹𝗶𝗸𝗲 𝗲𝘅𝗽𝗹𝗮𝗶𝗻𝗮𝗯𝗹𝗲 𝗔𝗜 𝗮𝗿𝗲 𝗯𝗲𝗶𝗻𝗴 𝘂𝘀𝗲𝗱 𝘁𝗼 𝘀𝗮𝗳𝗲𝗴𝘂𝗮𝗿𝗱 𝘁𝗵𝗲𝗶𝗿 𝗳𝗶𝗻𝗮𝗻𝗰𝗲𝘀. The CEO at 𝘊𝘰𝘮𝘱𝘭𝘺𝘈𝘥𝘷𝘢𝘯𝘵𝘢𝘨𝘦, Vatsa Narasimha, comments that “Whether they use AI to identify fraud patterns, analyse networks or streamline processes, banks can take the lead on what we believe will be a key trend in 2024: explainability, namely the ability to demonstrate to their customers how and why AI models have taken decisions that affect them.”. 𝟯) 𝗪𝗶𝘁𝗵 𝗱𝗶𝗴𝗶𝘁𝗮𝗹 𝗽𝗮𝘆𝗺𝗲𝗻𝘁𝘀 𝗰𝗼𝗻𝘁𝗶𝗻𝘂𝗶𝗻𝗴 𝘁𝗼 𝗲𝘅𝗽𝗲𝗿𝗶𝗲𝗻𝗰𝗲 𝗱𝗼𝘂𝗯𝗹𝗲-𝗱𝗶𝗴𝗶𝘁 𝗴𝗿𝗼𝘄𝘁𝗵 𝘆𝗲𝗮𝗿 𝗼𝗻 𝘆𝗲𝗮𝗿, 𝗰𝗿𝗶𝗺𝗶𝗻𝗮𝗹𝘀 𝗮𝗿𝗲 𝘂𝘀𝗶𝗻𝗴 𝗻𝗲𝘄 𝘁𝗲𝗰𝗵𝗻𝗼𝗹𝗼𝗴𝗶𝗲𝘀 𝘁𝗼 𝗰𝗼𝗺𝗺𝗶𝘁 𝗳𝗿𝗮𝘂𝗱 𝗼𝗻 𝗮 𝗺𝗮𝘀𝘀 𝘀𝗰𝗮𝗹𝗲. 𝟰) 𝗠𝗶𝗹𝗹𝗲𝗻𝗻𝗶𝗮𝗹𝘀 𝗮𝗿𝗲 𝗯𝗲𝗶𝗻𝗴 𝗵𝗶𝘁 𝘁𝗵𝗲 𝗵𝗮𝗿𝗱𝗲𝘀𝘁 𝗯𝘆 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝗳𝗿𝗮𝘂𝗱  “Millennials have embraced digital payments and mobile banking, which dominate how we access banking services today,” concludes Narasimha. “The scale of fraud amongst this generation demonstrates how quickly criminals exploit technology and changes in consumer behaviour. 𝟱) 𝗕𝘆 𝗳𝗮𝗿, 𝘁𝗵𝗲 𝗺𝗼𝘀𝘁 𝗰𝗼𝗺𝗺𝗼𝗻 𝘁𝘆𝗽𝗲 𝗼𝗳 𝗳𝗿𝗮𝘂𝗱 𝘁𝗼 𝘄𝗵𝗶𝗰𝗵 𝗰𝗼𝗻𝘀𝘂𝗺𝗲𝗿𝘀 𝗳𝗲𝗹𝗹 𝘃𝗶𝗰𝘁𝗶𝗺 𝘄𝗮𝘀 𝗰𝗿𝗲𝗱𝗶𝘁 𝗰𝗮𝗿𝗱 𝗳𝗿𝗮𝘂𝗱 (𝟱𝟵%), 𝗳𝗼𝗹𝗹𝗼𝘄𝗲𝗱 𝗯𝘆 𝗶𝗱𝗲𝗻𝘁𝗶𝘁𝘆 𝘁𝗵𝗲𝗳𝘁 𝗮𝗻𝗱 𝗽𝗵𝗶𝘀𝗵𝗶𝗻𝗴 (𝟮𝟭%). #fraud #financialcrime #ai #cybersecurity

Want to fight fraud? If so, AI may be the key. In fact, at Mastercard, we KNOW it's the key! In 2023 alone, Mastercard’s AI-powered insights protected more than 143 billion transactions and deflected $20 billion in fraud across its network. Here are a couple of ways that AI helps us prevent fraud at Mastercard: ➡️ AI can help banks and merchants confirm a customer’s identity before they begin transacting, or at the time of an account opening. ➡️ Once a customer initiates a transaction, Mastercard’s Decision Intelligence solution applies thousands of data points to help banks determine whether there’s fraud. ➡️ The First Party Trust program, an AI-powered platform, lets merchants share data about the transaction to bolster the case against dishonest chargebacks. #FraudPrevention #AI #Identity #TransactionSecurity #MastercardEmployee

The fraud threats posed by #artificialintelligence are widely discussed, but in discussion with Payment Expert, Philipp Pointner (Chief of Digital Identity at Jumio Corporation) explains how AI can be used to effectively counter these risks. https://lnkd.in/ebKN-6PV

Did you know, after Southeast Asia, Latin America has the highest percentage of overall revenue lost to fraud (20%), and 𝗼𝗻𝗲 𝗶𝗻 𝗳𝗶𝘃𝗲 𝗲-𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗲 𝘁𝗿𝗮𝗻𝘀𝗮𝗰𝘁𝗶𝗼𝗻𝘀 𝗮𝗿𝗲 𝗱𝗲𝗰𝗹𝗶𝗻𝗲𝗱 𝗮𝘀 𝗳𝗿𝗮𝘂𝗱𝘂𝗹𝗲𝗻𝘁? As part of their Em Conversa series, The Fintech Times, sat down with our CTO Carlos Santa Cruz to discuss the work Lynx are doing to combat fraud and the role AI can play to support the region. "We’ve been working with financial institutions across the continent to build machine-learning models that analyse large volumes of transaction data and identify patterns indicative of fraudulent behaviour." Learn more about how AI can protect your institution. Read the full interview here: https://bit.ly/46SZ5IL #Fraud #FinancialCrimeFighter #AI

🚨 New insights on combating fraud in financial services 🚨 The 2024 "Next-Gen Technologies to Detect Fraud & Financial Crime" report explores how AI is transforming fraud detection in banks, fintechs, and PSPs. Highlights include: AI's role in mitigating scams, payment, and identity fraud. Challenges around instant payments and the use of Verification of Payee (VOP). AI-driven collaboration for fraud detection without breaching compliance. Stay ahead in the fight against fraud by embracing these innovations! #FraudPrevention #FinCrime #AI #Fintech #CyberSecurity https://lnkd.in/eTaPiay8

The rise in identity fraud in fintech—a staggering 73% increase between 2021 and 2023—is alarming. It’s clear that fraudsters are leveraging the latest technology, including AI, to execute increasingly sophisticated scams. But it’s not all doom and gloom. Financial institutions are fighting back with AI too. We’re seeing some powerful tools being deployed to stay ahead of fraudsters. These innovations are crucial to protecting consumers and businesses alike. I’m particularly impressed with Revolut’s advanced AI scam detection feature, which can interrupt a scam in progress. It’s a great example of how proactive measures can make a real difference. As fraudsters evolve, so must our defenses. It’s an ongoing battle, but with the right technology, we can stay one step ahead. How is your company tackling the rise of fraud? #IndustryTrends #FinancialServices #Fintech #FraudPrevention

Today, I audited an online discussion on Generative AI (GenAI) and the rise of deepfakes in banking organized by Deloitte. While GenAI has already proven a useful boon in the workplace, it also can be exploited in the wrong hands. The conversation focused on what financial institutions can do to safeguard accounts through the creation of more sophisticated fraud detection models, but my primary takeaway lies closer with the consumer: HELP YOUR FINANCIAL INSTITUTION HELP YOU. - Take advantage of multifactor authentication protection (MFA). This field is evolving, and new biometric authentication methods like facial recognition or fingerprint scanning are becoming increasingly common. Staying informed about these advancements can help you be more secure. - Try to be consistent in your financial behavior. If you typically enter a passcode at a certain speed and then one day, it's entered at a different rhythm, or you suddenly make a series of random and inconsistent withdrawals, appreciate the effort behind Know Your Customer (KYC) to protect your assets if your institution asks you to submit to another security protocol. - Check all your accounts frequently. Synthetic identity fraud—when cybercriminals create new identities with stolen or fabricated data - can happen in a moment. Your financial institution needs to know if something is amiss, and they need to know as soon as possible. - Educate children early. If they have accounts, teach them to check frequently as well. This is not only a good habit to develop for life but some synthetic identities may be kept dormant for years. When a customer reports fraud and an institution swings into action, numerous resources are brought to bear on investigating the situation, from IT to Legal to Communications and more departments. This is time away from their daily work maintaining and improving the institution and providing customer service. You can help your financial institutions by keeping a sharp eye out yourself. What other tips do you have for staying vigilant against fraud in the digital age? #GenAI, #BankingSecurity, #FinancialLiteracy