Why Fraud Detection is Imperative to Asia’s Digital Banking Revolution

Why Fraud Detection is Imperative to Asia’s Digital Banking Revolution

by June 2, 2020

In recent years, we have witnessed accelerated growth in Asia’s digital banking sector. More fintechs and newly licensed virtual banks are coming to market to address the unbanked segment, while traditional banks are transforming to manage costs and achieve operational efficiency in this increasingly competitive landscape.

However, digitization has also exposed businesses to new risks, such as online identity fraud, account takeovers and data breaches. These are especially pertinent threats to all digital businesses and consumers. For instance, leaked personal information such as consumer account details, ID document numbers and passwords can now be easily accessed via the dark web, leaving users vulnerable to identity theft and account takeover attacks.

Fraudsters are growing increasingly advanced with the sophisticated techniques and technologies they now use to impersonate legitimate users. Deepfake technology poses a growing identity threat. A deepfake is the use of advanced artificial intelligence (AI) to create seemingly real videos that take a person in an existing image or video and replace them with someone else’s likeness. While it is usually politicians and celebrities who are the most common targets of these attacks, deepfakes are becoming more of a cybersecurity challenge, especially from an identity verification perspective. In one instance, fraudsters used AI to impersonate the CEO of a German firm’s parent company, eventually tricking another executive into wiring nearly $250,000 to a foreign bank account.

The proliferation of these cybersecurity threats demonstrates the need for more robust biometric-based verification systems to complement traditional methods such as password and SMS-based two-factor authentication solutions. On the other hand, the rise of deepfakes and identity spoofing technologies also represents a potential challenge to biometrics-based verification systems. Today, more companies are integrating real-time liveness detection capabilities into their eKYC systems to ensure the remote user is physically present and defend against spoofing attacks. As our digital economy grows, multi-factor biometric identity verification and certified liveness detection technologies will evolve accordingly, to better serve and address the changing security needs of business and consumers.

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From a business perspective, there is also greater need for organisations to pay more attention to customer acquisition and identity verification across the globe. eKYC solutions are empowering financial service providers to tap into the massive unbanked market in Asia and expand their digital footprint overseas. Yet while existing biometrics, AI and machine learning technologies bring speed and higher security to customer identification processes, the industry requires solution capabilities that can quickly and reliably verify various ID documents on a global scale.

If you are a company with a dynamic global outreach, it’s time to rethink and streamline your approach to customer onboarding, identity verification and ongoing user authentication. We must continue to stay a step ahead of bad actors in order to fuel Asia’s digital economy.

Learn more by downloading Jumio’s new guide, How eKYC is Streamlining Digital Banking: An Asia-Pacific Perspective.

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