The payments industry, as we know it today, is divergent from what it was a decade ago. From decentralised finance to online banking, this shift has been mainly driven by advancements in technology and the changing ways consumers interact with money.
Safeguards around personal finance have also been strengthened significantly to protect consumers, however this boost in security seems to reflect a worrying trend of increasingly sophisticated fraud cases, especially in online payments where the human factor has been minimised.
In a webinar exploring the issue of fraud in online payments, The Payments Association (PA) spoke with experts from some of the UK’s most recognised financial brands to try and summarise how we can use technologies such as AI and biometrics to combat the evolving nature of financial crime.
After acknowledging that criminals do not worry about regulations or borders, and that they’ll exploit every gap they’ll see, Jane Jee – panel moderator and Financial Crime Lead at The PA – turned to Chris Parker, Head of Threat at NatWest Group, asking him about the role that generative AI has in defeating those criminals and curbing fraud.
Parker then went on to explain the essential concept behind generative AI and how it can be used for both good and bad based on the user’s intentions.
“Generative AI is any number of different things using artificial intelligence,” he said. “That could be voice, could be face, could be imagery, could be data – conceivably all manners of things that AI can be pointed to.
“The ways in which that data is generated and the purpose of that obviously can equally have both good and bad outcomes in terms of the intent and direction of use.
“We definitely recognise AI for both us and our customers as a threat that’s growing. There’s a lot of criminality that recognises its potential and is starting to harness AI for bad.”
There have been reports in the US where people who pick up their phones are met with an almost life-like copy of a relative’s voice that has been generated by AI, used to ask for money under the presumption that an accident has occurred.
Elsewhere across the pond, UK money influencer and Founder of Money Saving Expert Martin Lewis recently had his likeness and voice stolen by fraudsters to create a so-called ‘deepfake’ of him and promote a scam to his audience.
“Preventing is definitely better than curing,” Parker added on the tools needed to curb fraud. “If we are able to identify individuals who may be at greater risk, the sooner we can do that, the sooner we can educate and support them, which is great for everyone involved.”
Picking up from Parker’s point, Conrad Lennard, Director of Global Product Sales, Cyber & Intelligence at Mastercard, explained that the financial industry is always a bit sluggish in adopting new technologies, especially in the retail areas of finance.
“Technology will always take longer in finance and particularly in the retail areas of finance because of regulation or indeed the lack of. Big players in particular are very hesitant to be the first movers in a space where they know there are potentially lawsuits coming down the track always in terms of privacy and GDPR.”
According to Lennard however, there are plenty of good examples, in the UK at that, where certain challenger banks have taken up the role of first movers by becoming e-money institutions, and their success then acts as a catalyst for incumbent players like NatWest and HSBC to develop the technology further and become “happy” second movers.
The full webinar can be viewed here.
