Financial firms tackle fraud with AI and biometrics
As financial fraud in the UK evolves, so too does the financial industry, stepping up its efforts to tackle the issue with new technologies, such as biometrics and artificial intelligence.
By Anna Fedorova
More than £500 million has been stolen from customers of UK banks in the first half of 2018, according to the latest data released by UK Finance.
Though the amount lost as a result of unauthorized financial transactions has fallen by 2% to £358 million in H1 2018, authorized push payment scams, where the account holder is duped into making the payment to another account, have risen by some 44% compared with the same period in 2017, to £145.4 million.
Authorized fraud is typically committed through social engineering tactics, where criminals pose as genuine individuals or organizations using telephone, email, text messages and increasingly social media.
Though the statistics on authorized fraud for the two periods are not comparable – four additional UK Finance members began reporting data as of January 1, 2018 – the numbers nevertheless indicate the scope of the problem, with new sophisticated methods making it harder to detect and prevent fraudulent activity.
Authorized payment scams are particularly dangerous since current legislation means customers have no legal protection to cover them for losses – which is different for an unauthorized transaction.