How to balance customer experience and security in banking and finance
By NEC
Suresh Neelakantan, Business Development Director, VCI Lab, NEC Asia Pacific, shares how the latest tech tools are building trust in online finance.
While Abagnale used fake uniforms to con unsuspecting citizens, today’s fraudsters adopt different tactics. They use the virtual world as their cover to take on fake identities and commit fraud.
Suresh Neelakantan shares how facial recognition technology, AI and blockchain can keep potential fraudsters at bay.
Securing digital identity
Facial recognition technology can ensure that the two parties making a transaction online are who they say they are, Suresh says. With each person verifying their biometrics beforehand, it reduces the “fear factor” of online finances, he adds.
This is especially important during the pandemic period, where online transactions are more commonplace, he points out.
But not every citizen has access to facial recognition tools on their device, Suresh points out. In these situations, other security measures such as two factor authentication will ensure citizens are notified when money tries to leave their account.
Facial recognition can help secure ATMs by removing the need for a bank card. This can reduce the risk of card theft and card skimming, where devices are illegally attached to ATM machines to steal the card’s information, wrote The Straits Times.
One example of this risk was when a criminal installed skimming devices on ATM machines in Singapore. He looted more than 724 bank accounts, with over SG$1 million (US$737,000) illegally withdrawn, reported Yahoo News.
But facial recognition also enables more personalised citizen services. In-person helpdesks could identify individuals as they join the queue. Staff could then bring up the relevant information before the citizen reaches the counter, he explains.
This could be especially useful when a citizen has filed a complaint. When the citizen visits a local branch to address the issue, staff members can have the details of the complaint in front of them as soon as the individual walks through the door, he shares.
Preventing fraud with AI
AI is another tool that can secure financial transactions. AI could potentially help financial organisations to step in before blacklisted groups access their services, Suresh says.
Government agencies and investigative organisations are currently using AI to identify those who are associated with blacklisted or suspicious organisations, he shares.
They do this by using an AI tool to analyse publicly available information on the internet. This could include social media, news articles, company websites, and online business directories, he continues.
But financial organisations are yet to keep up with these other agencies, says Suresh. Adopting these tools for finance will help protect the hard-earned money of citizens, he adds.
AI also excels at understanding behavioural patterns, he emphasises. Financial organisations have the spending data of citizens, keeping record of the regular stores they visit and how frequently they spend money there, for example.
AI systems can detect changes to this spending pattern, highlighting instances where purchases have been made online without two factor authentication. This means that citizens can be instantly informed when it detects unusual behaviour.
Protecting underbanked populations
Protecting citizens without access to financial services is another issue Suresh highlights. NEC is working alongside blockchain providers to provide and secure financial access for underbanked citizens in Buenos Aires, Argentina, it wrote.
It is helping to develop a digital identity for citizens that didn’t have the documents to access financial services.
It enables citizens to access a digital wallet, where they can store and spend money, while the tamper-proof blockchain network ensures privacy.
This is just one example of how NEC works with other organisations to improve financial transactions for citizens. By partnering with governments, NEC can develop the tech tools that can secure and simplify financial services for citizens.
Today’s fraudsters have moved beyond disguises, they have a whole host of strategies to compromise identity information. Tools such as biometrics, AI and blockchain can improve the customer experience with increased security and reduced risks for citizens.