Financial Crime World

Banks Face Tough Choices Over Protection of Sensitive Data

In the rapidly changing cybersecurity landscape, banks are being forced to make tough decisions about how to protect sensitive data, including biometrics.

As artificial intelligence (AI) and machine learning (ML) become increasingly prevalent in financial services, banks must navigate the challenges of ensuring the security and integrity of customer data. With the increasing threat of fraud and cyberattacks, banks are being forced to choose between two options: deleting sensitive data or finding a partner that meets high standards for data protection.

Biometric Technologies Offer a Solution

Biometric technologies, such as voice and behavioral biometrics, can be used to validate an individual’s identity immediately based on how they sound or behave. This means that agents can identify a customer immediately and start personalizing the interaction from the outset.

  • According to Brett Beranek, VP & General Manager, Security and Biometrics at Nuance Communications: “In order to ensure that their customers are protected, while still delivering a human-like experience, many FS organisations will turn to modern AI-powered technologies such as biometrics next year.”

The Dark Side of Buy Now Pay Later Fraud

However, with great power comes great responsibility. Martin Rehak, CEO of Resistant AI, warns that “fraudsters are operating systematically to find holes in the automated processes financial services are putting in place… Executioners of fraud are now just customers of the same hacking professional classes that have been plaguing IT professionals for years.”

Armen Najarian, Chief Identity Officer at Outseer, also highlights the growing problem of Buy Now Pay Later (BNPL) fraud: “Cash-strapped individuals try[ing] and get away with more and more first-party fraud – using the service and collecting the merchandise with no intent of repaying the loan.”

Other trends that are likely to shape the cybersecurity landscape in 2022 include:

  • The rise of deepfakes and auto-diallers, which can be used to exploit corporate security measures
  • An increase in bot attacks, particularly in the cryptocurrency space
  • A growing focus on law enforcement involvement in investigating and prosecuting cybercrimes

Protecting Sensitive Data Requires a Multi-Layered Approach

As the financial services industry grapples with these challenges, it is clear that protecting sensitive data will require a multi-layered approach that combines advanced technology, strong internal controls, and effective fraud detection.

Key Quotes

  • “In order to ensure that their customers are protected, while still delivering a human-like experience, many FS organisations will turn to modern AI-powered technologies such as biometrics next year.” - Brett Beranek, VP & General Manager, Security and Biometrics at Nuance Communications
  • “Fraudsters are operating systematically to find holes in the automated processes financial services are putting in place… Executioners of fraud are now just customers of the same hacking professional classes that have been plaguing IT professionals for years.” - Martin Rehak, CEO of Resistant AI
  • “Cash-strapped individuals try[ing] and get away with more and more first-party fraud – using the service and collecting the merchandise with no intent of repaying the loan.” - Armen Najarian, Chief Identity Officer at Outseer

Key Statistics

  • £4.1bn: The amount of outstanding debt racked up by shoppers using Buy Now Pay Later services
  • 85%: The hit rate of people giving over OTPs to bots using auto- diallers