On April 23, AU10TIX participated in the Wharton FinTech 2021 Conference, soaking up two jam-packed days of digital panels on payments, security, identity and financial inclusion. We also participated in a panel discussion of our own on what we expect “The Next Generation of Digital Identity” to hold.
Moderated by Adrian Murphy, partner at McKinsey and expert in financial crimes compliance, fraud, and KYC, the panel welcomed the perspectives of our CEO Carey O’Connor Kolaja; as well as Charles Delingpole, CEO of ComplyAdvantage; Gabrielle Haddad, COO of Sigma Ratings; Laura Spiekerman, CRO of Alloy; and Naftali Harris, CEO of SentiLink.
Together, we explored the impact of the pandemic on our industries and businesses and what we’ve learned about identity, fraud, and where the greatest risks and opportunities lies.
Here are four key takeaways from Wharton FinTech 2021:
1. The continued rise of identity theft is everyone’s problem.
In large part due to the shift to digital-only banking, bad actors took their schemes digital during the pandemic. This led to identity theft losses of $712.4 billion-plus in 2020, up 42% from 2019. While human-initiated attacks fell by 184 million, automated bot attacks—in which fraudsters attempt to break into existing customers’ accounts by repeatedly trying login combinations—shot up by 100 million.
These schemes struck businesses across various categories. And while banks, lenders and other financial platforms were hardest hit by attacks, no sector can consider itself spared from the wrath of fraudsters. Industries that are new to fraud prevention are now rushing to play catch up. For example, the U.S. government is now proactively wrestling with fraud as criminals are making false claims and using fake or stolen identities to siphon off funds from the Paycheck Protection Program and Economic Injury Disaster Loan program.
2. ID verification services should be flexible to meet each organization’s unique needs to balance safety and customer experience.
Retail banks, lenders and other financial services providers will always have to navigate a tension between two key goals: smooth, swift customer access to their services and robust, regulatory-compliant identity verification measures. Because each company has unique needs and challenges, achieving this balance of seamlessness and security requires a more flexible approach to the identification process.
Verification processes that allow firms to customize the level of scrutiny to which new users are subjected can help them better gear onboarding features toward their businesses’ particular needs. Firms in the financial services sector, which tend to face more fraud risks than those in other industries, can dial up security, for example, while businesses facing fewer concerns can streamline their operations.
3. Advanced technologies such as artificial intelligence (AI), machine learning (ML) and biometric authentication are leading the way forward for identity management.
More than 75% of financial leaders predict that AI will be the most important technology for the banking space over the next few years. And 66% of banking executives believe ML tools, blockchain solutions and the internet of things will play a significant role in the space. Already, we’re seeing financial institutions increasingly rely on AI and ML tools to enable seamless onboarding and login experiences for legitimate users while keeping fraudsters at bay.
In addition, consumer-facing tools like biometric identification measures are helping companies achieve their security goals without alienating the rush of new customers seeking quick, convenient digital services. Biometric authentication is proving particularly useful for verifying older customers who may have difficulty providing fingerprints on smartphones or using other types of authentication.
And at AU10TIX, our INSTINCT platform is using adaptive analytics and data so the global business community can anonymously fight fraud together. This making it possible to leverage signals from one organization to detect similar patterns across all other organizations on the network.
4.Digital asset innovation is outpacing regulatory framework, making adaptive technology essential for identification.
Because identity verification is a compliance and security requirement within many industries, it’s imperative to have adaptive technology that instantaneously scales regardless of demand or changes in regulatory framework. For financial institutions, advanced tools that automate verification and complete the process rapidly, thus preserving the customer experience, can be game changers as they seek to comply with anti-money laundering (AML) requirements.
And in the cryptocurrency market, where fraud prevention technology is business critical to ensuring safety, accuracy and efficiency during a dynamic and unprecedented time, the digital currency exchanges in particular require ID verification solutions that are agile. AU10TIX’s automated identity verification takes as little as 4 seconds, so digital currency exchanges can safely keep pace with consumer expectations and evolving regulations.
With the acceleration in fraud due to the pandemic, it’s never been more important—or possible—for businesses to have a secure, compliant digital onboarding and verification process while still providing a seamless experience for users.
To learn more about AU10TIX’s industry-leading solutions, click here.