Fintech Focus: Preparing systems for the fraud of tomorrow
It’s clear that we’re living through a period of intense innovation right now. From the advent of Web 3.0 solutions to the rise of AI systems, it feels like a new technological age is dawning all around us. There’s a lot to be excited about, but like with any moment of change, the period also needs to be carefully managed. Specifically, there’s now growing concern that these modern solutions could soon be leveraged against individuals and businesses in the pursuit of fraud to devastating effect.
From advanced chatbots, to deep fake technologies, the scope for nascent technological developments to be adopted by fraudsters and leveraged within fraud attacks in the short-to-medium term future is striking. In this article, we will look at three of the biggest problems that could be caused by this shift and evaluate how they could soon be used within the world of online fraud. Later, we will offer guidance on potential solutions to these issues and explain how businesses can ensure they’re properly prepared for the challenge ahead.
#1 Deep fake technologies and fraudsters
The internet has always afforded users a degree of anonymity, which can be both a blessing and a curse. However, by the end of the decade, it will likely be even more difficult to figure out who we are talking to online, and more importantly whether they’re a real person, or not. That’s because solutions, such as chatbots are becoming much more advanced. Specifically, AI chatbot programs, which are becoming increasingly accessible to all, including fraudsters, are now capable of simulating human-like conversation.
These solutions already pose a significant fraud challenge. Right now, chatbots are routinely used to enhance the effectiveness of various forms of fraud, including phishing scams. By making fraudulent websites seem more trustworthy, fraudsters can leverage chatbots to improve the efficacy of phishing attacks significantly. Sadly, as these technologies become even more intelligent this problem could become even greater. In the future, fraudsters will likely be able to leverage these technologies to pull off more elaborate, and effective scams.
#2 Social engineering and the role of social media fraud
Social engineering attacks have existed long before the internet. In fact, it’s often argued that the first successful attack of this kind was the famous ‘Trojan Horse’ used by the Greeks to enter the city of Troy. However, social engineering attacks of today don’t require the creation of a giant wooden structure, and yet, they are still just as effective. In fact, certain technologies are helping to make this form of fraud more damaging than ever before. Perhaps none more so than social media, which has quickly become an integral part of our everyday lives, to the delight of fraudsters around the world.
Social media is helping fraudsters to gain insights into the lives of individuals and businesses in a way that simply wasn’t possible before. With access to this additional information, fraudsters can develop more convincing, personalized social engineering schemes, which are more likely to ensnare an unsuspecting victim. Sadly, given the popularity of these platforms, it’s difficult to see how this challenge is rectified. However, as we will explain later in this article there are also ways to use social media data to fight fraud.
3# The innovation of fraudsters
While the fraud prevention community has experience dealing with the challenges of phishing scams, and social engineering attacks, there are also totally new fraud challenges made possible by modern technologies, which must also be prepared for. One area of concern is the advent of deep fakes. In the last few years, there’s been considerable talk around this topic, but very few commentators have really considered how this innovation could be used to propagate highly effective fraud attacks on unsuspecting victims.
Imagine a world where fraudsters can enhance phishing scams by leaving fake voicemails, or video messages purporting to be from a person the victim knows and trusts. It doesn’t require a criminal mastermind to figure out how that could help to make fraud attacks harder to stop. Sadly, while that scenario might sound totally outlandish right now, there are few experts who’d disagree it isn’t feasible in the short-to-medium term future. Unfortunately, if we don’t prepare properly today, it has the potential to cause untold damage tomorrow.
Today's solutions for fraud prevention in fintech
Therefore, the question for those of us involved in the world of online fraud prevention is relatively basic - what can be done to mitigate the risks associated with these technologies before they become too widespread?
Clearly, the ability to authenticate people on the internet is about to become more important than ever before. Should the line between fake and real become too blurred online, then we will require new tools to guide us to the truth. In short, these solutions will need to be capable of identifying, extracting, and quantifying relevant digital information to decide the likelihood of an individual being real, or not. To this end, the fraud monitoring and prevention solutions of tomorrow will need to be extremely sophisticated in assessing and enriching key data points.
Thankfully, this is an increasingly achievable objective, especially when working alongside the right fraud prevention partner, such as SEON. That’s because we’re able to intelligently assess the social and digital footprints of online users to determine the likelihood of fraud. Specifically, by checking on social footprints, our system provides fast, reliable, and robust detection results. That’s because while fraudsters can fake a lot online, it still remains too expensive to manage and maintain active social media accounts across various platforms.
Therefore, the good news is that the fraud prevention solution of the future is already available right now. As such, the objective for businesses is to ensure that they are onboarding systems like ours ahead of time, and before they fall victim to this impending wave of more effective, sophisticated online fraud. Fortunately, with the assistance of companies like SEON, this task is being made far more manageable and far more accessible than ever before.
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