Tiffany Ryan, Westpac NZ Head of Financial Crime and Protective Services, shares her predictions for the future of fraud prevention in the FinTech sector.
As technology continues to evolve, so too does the sophistication of fraudsters. Ninety per cent of New Zealanders are concerned about being scammed or defrauded, and one in three say they’ve been a victim, according to a new survey by Westpac NZ.
Financial institutions are locked in a battle with fraudsters, with new technologies offering opportunities for both sides to gain the upper hand.
In the last two decades we have seen the introduction of online banking platforms, e-commerce transactions and mobile banking applications all enabling more convenient ways for customers to transact. The downside is that it has also seen the rise of the cyber-fraudster.
As an industry we are seeing increases in banking-specific malware, often delivered to customers through targeted and well-crafted email and ad-ware campaigns. Data breaches are becoming more common as customers choose to share more information about themselves via online channels, and there are no signs of these trends slowing.
Investing in technology such as artificial intelligence and machine learning enables financial institutions to embrace real-time pattern recognition capability in the hunt for data anomalies. This coupled with the opportunities presented through Open Banking make for some exciting times working in the fraud risk area of any financial institution.
What does the future look like?
The use of biometrics, both voice and facial recognition, is growing in the market with many of the New Zealand banks launching a variety of options that provide improved customer experience and a more secure environment.
The ultra-secure transactional benefits of Blockchain technology are also now evident, and the data integrity elements it offers are of particular interest to those fighting fraud.
Customers’ banking information remains one of the highest selling data sets on the dark web, with the data often sold multiple times globally. The increasing use of digital wallets enables alternative options for banks to replace traditional card products faster, with less adverse customer impacts – as let’s face it, it is an absolute pain having to reset all your automatic payments if your card is compromised.
As technology continues to enable the growth of the cyber-fraudster, the financial industry must continue to evolve and stay one step ahead, through innovations in fraud prevention technology.