Fintech Focus: Preparing systems for tomorrow’s fraud

It is clear that we are living through a period of intense innovation right now. From the rise of Web 3.0 solutions to the rise of AI systems, it feels like a new technological age is dawning around us. There is much to be happy about, but as with any moment of change, the period must also be carefully managed. Specifically, there is now growing concern that these modern solutions may soon be exploited against individuals and businesses in pursuit of fraud with devastating effect.

From advanced chatbots, to deep fake technologies, the potential for new technological developments that can be adopted by fraudsters and exploited within fraud attacks in the short to medium term is striking. In this article, we will look at three of the biggest problems that could be caused by this shift and consider how they may soon be used in the world of online fraud. Later, we will offer guidance on potential solutions to these problems and explain how businesses can ensure they are well prepared for the challenge ahead.

#1 Deep Fake Technologies and Scammers

The Internet has always provided users with a degree of anonymity, which can be both a blessing and a curse. But by the end of the decade it will probably be even harder to figure out who we’re talking to online, and more importantly whether or not they’re a real person. That’s because solutions, such as chatbots, are becoming much more advanced. In particular, AI chatbot programs, which are becoming increasingly accessible to everyone, including fraudsters, are now capable of simulating human-like conversations.

These solutions already pose a significant fraud challenge. Right now, chatbots are routinely used to improve the effectiveness of various forms of fraud, including phishing scams. By making fake websites appear more trustworthy, fraudsters can leverage chatbots to greatly improve the effectiveness of phishing attacks. Unfortunately, as these technologies become even more intelligent, this problem may become even greater. In the future, fraudsters will likely be able to exploit these technologies to carry out more elaborate and effective fraud.

#2 Social engineering and the role of social media fraud

Social engineering attacks have existed long before the internet. In fact, it is often claimed that the first successful attack of this type was the famous “Trojan horse” used by the Greeks to enter the city of Troy. But today’s social engineering attacks don’t require the creation of a giant wooden structure, and yet they’re still just as effective. In fact, certain technologies are helping to make this form of fraud more harmful 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 worldwide.

Social media helps fraudsters gain insight into the lives of individuals and businesses in a way that was simply not possible before. With access to this additional information, fraudsters can develop more convincing, personalized social engineering schemes, which are more likely to catch an unsuspecting victim. Unfortunately, given the popularity of these platforms, it is difficult to see how this challenge is rectified. But as we’ll 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 entirely new fraud challenges enabled by modern technology that must also be prepared for. One area of ​​concern is the use of deep fakes. In recent years there has been a lot of talk about this topic, but very few commentators have really considered how this innovation can be used to spread highly effective fraud attacks on unsuspecting victims.

Imagine a world where fraudsters can improve phishing scams by leaving fake voicemails or video messages pretending to be from someone the victim knows and trusts. It doesn’t take a criminal mastermind to figure out how it can help make fraud attacks harder to stop. Unfortunately, while that scenario may sound outlandish right now, few experts disagree that it’s not possible in the short to medium term. 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 reduce the risks associated with these technologies before they become too widespread?

It is clear that the ability to authenticate people on the internet is becoming more important than ever before. Should the line between fake and real become too blurred online, we will require new tools to guide us to the truth. In short, these solutions must be able to identify, extract and quantify relevant digital information to determine the likelihood that an individual is genuine or not. To this end, tomorrow’s fraud monitoring and prevention solutions must be extremely sophisticated in assessing and enriching key data points.

Fortunately, this is an increasingly achievable goal, especially when you work with the right fraud prevention partner, such as SEON. That’s because we are able to intelligently assess the social and digital footprints of online users to determine the likelihood of fraud. Specifically, by checking social footprints, our system provides fast, reliable and robust detection results. That’s because even though fraudsters can fake a lot online, it’s still too expensive to manage and maintain active social media accounts across different platforms.

Therefore, the good news is that the fraud prevention solution of the future is already available right now. As such, the goal for businesses is to ensure they get into systems like ours in advance, 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.

About the author: Tamas Kadar is CEO and co-founder, SEON