By Anil Tadimeti
Artificial Intelligence (AI) has become a reckoning force in various industries, be it automobile, healthcare, finance, or ecommerce. While AI has increasingly been associated with the positive impacts it brings on, it has also emerged as a growing threat to identity security.
Let’s take this example – A relative or a colleague reaches out to you in distress and ask you to transfer money. Do you transfer Rs 10,000 or $25 million? It depends on your luck or rather ill luck. Welcome to the world of Deepfakes. Deepfakes, for instance, leverage AI to create realistic video forgers that can impersonate individuals, leading to financial scams and reputational damage. So the larger question is: how can a technology, with the potential to exploit vulnerabilities, also be harnessed to combat fraud?
Why Does AI Make Us Vulnerable?
The success of social engineering scams like deepfakes hinges on two factors:
Familiarity: When a seemingly familiar voice or face reaches out to you, especially in a situation designed to create urgency, our natural tendency is to trust those we recognize, and this weakens our scepticism.
Instant, Real-Time Payments: The growing popularity of instant payment methods creates a situation where fraudulent transactions can be completed before victims realise they’ve been scammed, leaving limited recourse for recovery.
A recent report highlights a staggering 700% increase in “face-swap injection attacks” fueled by generative AI, underlining the alarming rate at which technology is being weaponized for fraud.
The AI Advantage: Turning the Tables on Fraudsters
A 2022 Deloitte survey revealed that 78% of bankers anticipated a rise in fraud. Two years later, this fear has become a reality. However, while concerns about AI-driven scams are valid, businesses can combat them by embracing advanced verification and authentication solutions, alongside robust real-time monitoring systems.
Surprisingly, the answer to this AI-driven fraud lies within AI itself. Businesses can leverage this technology to significantly improve their security posture while enhancing customer experience. AI excels at processing massive datasets. By training risk models on historical
data, businesses can achieve superior precision and predictive capabilities in identifying fraudulent behaviour.
Some AI-driven Approaches to Combat Fraud
Risk-Based Authentication: The rise of AI causes knowledge-based authentication mechanisms (password, PIN etc) to be weak and also renders biometric authentications vulnerable.
AI powers behavioural biometrics which is based on device interactions and creates unique personas from behavioural patterns such as scrolling speed and typing patterns. The collection of millions of data points to construct the unique person happens seamlessly with precise pattern recognition. Behavioural biometrics can thwart >80% of account takeover attacks
Robust onboarding process: Effective gatekeeping can prevent >60% of fraud by weeding out malicious actors at the onboarding. During customer acquisition, businesses can employ AI-driven document verification to identify tamper or forgery.
By comparing with vast amounts of genuine documents, it becomes easy to identify the forged ones. Beyond document verification, businesses can employ novel biometric authentication mechanisms that can identify deepfakes, recorded videos, detect blood flow to ascertain liveness.
Network Analysis: Fraud is increasingly becoming sophisticated and driven by organised groups in various parts of the world. A graph network to identify and analyse the relationship between various actors can unearth the extent of association and apprehend the perpetrators leading to a comprehensive takedown of syndicates/ groups and thus lead to true fraud prevention.
Network analysis can also uncover insider fraud, a looming concern for the industry.
The Citius, Altius, Fortius defense using AI
Citius (Faster): AI enables real-time responses (in milliseconds) for approving users and transactions.
Altius (Higher): AI allows for setting higher thresholds for data analysis and decision-making, minimizing false positives and improving accuracy.
Fortius (Stronger): AI empowers the processing of in-depth information from various sources, including device data, behavioral biometrics, and location intelligence for a more comprehensive risk assessment.
By adopting these AI-powered solutions, businesses can gain a significant edge over fraudsters, creating a more secure and trustworthy environment for their customers.
The author is strategy lead, Bureau
