Artificial Intelligence - The future of Online Industry

Knowledge based Authentication

Knowledge Based Authentication a Thing of Past

If you are wondering what is knowledge based authentication or KBA, let me ask you a question, ‘what is your pet’s first name?’. Such questions are asked to verify someone’s identity. This information about a person can be found online. After experiencing the vulnerability of such questions, the world is moving towards stricter yet efficient measures for granting access.

The Basics of Knowledge Based Authentication

A standard KBA system has four elements;

  1. The question should be suitable for a large population
  2. The user should easily be able to remember the answer
  3. There should be one correct answer
  4. Others should not be able to guess it

Going through this list alone reveals that many of these ‘barriers’ can be easily overcome. The premise is that if someone (or anyone) answers these questions correctly, their identity is verified. 

But this could be anyone answering correctly.

What Went Wrong with KBA

Since social media has spread like wildfire, finding personal information about a person has become easier. Let’s look at four ways why KBA is a weak security measure;

  • Easy to Find information on Social Media

It is becoming very easy to find information about a person on social media. The more they engage online the more ‘crumbs’ they leave for identity thieves. Go to LinkedIn to find where a person works, visit Facebook to find out the movies they like, search a twitter handle to see their political affiliations, and the list goes on.

  • Information is for Sale

There are only a finite number of KBA questions circulating the web. Figuring things out about someone is not that hard. After hacking a website, the hackers put this stolen information up for sale. Pay the right price and buy someone’s personal information.      

  • Agonizingly Slow User Log in Process

Every online portal performs a balancing act between usability and security. Put in place KBA questions and it slows down the entire online experience. The more rigid the authentication process the more chances that the customers will leave an unfinished form. This means fewer sales for an e-commerce website. 

  • KBA – The All Access Pass

The old form KBA used to give access after answering the security questions. The problem was that once access was granted it was like giving a kid the keys to the candy store. The identity thief had access to everything. There should be different checks and different levels of security to those checks.  Changing your profile picture does not carry the same risk as transferring $1000 into someone’s account. 

What about KBA 2.0?

Upgrading the old system won’t solve the problem. Authentication here is based on knowledge, which is becoming easy to acquire. Just look at your email spam folder. Probably you’ve never even heard of those companies but they still found out about you and your interests. 

Modern forms of Verification

  • Facial Recognition

The authentication trend has gravitated towards facial recognition. It is very difficult to appear as someone else in front of the camera. Even attempts of holding up a picture in front of the camera to fool the system are being thwarted by modern technology.

Facial recognition is becoming increasingly popular, specifically with banks. Not only that the banks are using it to give access to accounts but there have been pilot projects for onboarding with it. They are constantly on the hunt for the best online verification services.

  • Securing Identity with a Chain

The year 2017 saw the rise of cryptocurrencies. Bitcoin reached an unprecedented high. This wave also highlighted the technology that runs the cryptocurrencies, the blockchain. Better to address a misconception before proceeding.

Blockchain technology is not confined to cryptocurrency, it is a cryptic form of networking. Once this open ledger is in place it can be used for communication, monetary transactions, smart contracts, and many other things.  

The key feature of blockchain is that it protects your digital identity. It is ingrained with a digital watermark that is unique to you. Every transaction that you carry out is performed with it, it can’t be stolen.

Knowledge based authentication is slow, unsafe, and quite vulnerable to attacks. Deep learning and artificial intelligence based services are readily replacing KBA. These are much faster and safer. With API, they easily integrate with websites and smartphone applications. Going forward solutions such as facial verification and liveness tests will become common.

Artificial Intelligence

AI a Blessing – AML compliance cost reduced by $217 billion

The U.S. financial firms spend approximately $25.3 Billion in terms of compliance, risk management and AML procedures. Europeans banks come close with $20 Billion annual AML expenditure.

The increasing territorial and regulatory gap between organisations and consumers has lead to a demand for digitisation of operations. Regulatory bodies owing to evolving nature of online fraud and monetary assets (cryptocurrency) are putting a safety check on every interaction between a business and its consumer. This results in a narrow gap between compliance management and profits. But fortunately technology has evolved enough to remove this barrier.

Leveraging Artificial Intelligence

RegTech has gained sure footing in the recent years. By using AI, Machine Learning and Data Analytics it gave a relatively new approach towards traditional compliance procedure. Being fairly a newer concept, it definitely faced a pushback from regulatory bodies.

However, the situation now has changed.

The Financial Crimes Enforcement Network (FINCEN) has announced its ascent for organisations to “responsibly” implement and use AI powered approach towards meeting BSA/AML requirements. U.S. regulators have given a nod to emerging technologies and their possible applications for risk management.

 

A joint statement by five (5) U.S. Agencies, The Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, FinCEN, the National Credit Union Administration, and the Office of the Comptroller of the Currency stated that,

“private-sector innovation, including adopting new technologies and finding new ways to use existing tools, can help banks identify and report money laundering, terrorist financing, and other illicit financial activity.”

The first step towards engineering an AI based compliance procedure is to replace existing rule-based processes. This can be achieved by engaging transaction monitoring, and detection models with the help of Machine Learning. The inclusion of Artificial Intelligence reduces the cost of manual labour, time spent on monitoring, and inaccuracy of results with the help of intelligent solutions. These solutions are fed logic to their backend and are able to replicate a set of decisions based on past events. AI is not just a readymade solution. It gives an opportunity to organisations to train systems according to their requirements.

Banks, Payment processors and other FinTech institutes can identify relevant KYC and AML compliance processes and easily implement their AI based application. Owing to the nature of their operations financial institutions hold vast data banks. By using Big Data Analytics this data is easily divided and categorised into distinct chunks. These chunks are further assigned machine rules to “read” future transactions and apply processes based on that.

The traditional approach towards KYC and AML compliance may hinder practicality. With the help of innovative solutions organisations are now able to cut costs and reduce number of resources exhausted to secure compliant processes.

It is no surprise that the Global RegTech industry is expected is expected to grow to $12.3 Billion by 2023.

 

Read more on how RegTech makes AML Compliance effortless.

Fraud Detection

The Role of Artificial Intelligence in the Future Of Financial Fraud Detection

Until a few years ago Artificial Intelligence seemed like a thing from sci-fi movies. The whole concept seemed like fiction or a far fetched dream fed by wishful thinking. Then came personal assistants like Siri, Google Assistant, Bixby, Alexa and Cortana, which made the people realise that they could have something like a Jarvis in their homes as well. However, these are just known as weak AIs. Strong AIs are theoretically able to work with human cognitive abilities. Such advancing work in the field of AI is said to achieve tremendous goals in a number of fields including revolutionising the future of fraud detection.

Identity theft and fraud in the commercial sector has been a huge problem for nearly every merchant. Particularly since the increase in online buying of consumers, the number and types of online fraud have increased tenfolds. It is becoming an inevitable task for every business to implement productive anti-fraud solutions in their practices.

With the increase in online trade, cybercriminals have also found more intricate ways to defraud both businesses and end consumers. As the effect of access to information across the web snowballs, online scammers find new and more advanced ways to hoodwink retailers, online or otherwise.

Fraud in the Financial Sector

The financial sector, however, has been the most unfortunate victim of identity theft and online frauds and scams. MacAfee reported a loss of over 600 billion dollars to the global economy due to financial and other forms of cybercrimes. From Phishing scams to good old fashioned credit card to more modern fraud schemes including social engineering, card skimming, the Banking, Financial Services and the Insurance (BFSI) sector has seen the worst cases of frauds and has consequently suffered the most tremendous losses as well.

Read: How Augmented Intelligence is next stop in ID Verification Services?

The finance sector is constantly looking for ways to upgrade their systems an implement fraud protection measures, while cybercriminals are as a result looking and coming up with better and more advanced ways to hack into their databases or to compromise customer data to gain access to their finances. Such schemes are now being fought with advanced technology including machine learning and artificial intelligence.

The Market for Fraud Detection

The market for fraud detection and prevention services has gained a lot of popularity over the years, allowing the banking and the financial sector to fight fraudulent activities in an effective way. Up until now, the banking and finance sector was only able to put up walls against scammers or implement firefighting measures in case any scams surfaced.

In 2016 the entire market for such services was valued at 13.64 billion dollars. Better yet it is expected to cross 40 billion dollars by the year 2023. Primarily fraud prevention systems are software solutions that will provide conclusive and actionable solutions to identify frauds and block or at least limit any future occurrences.

Artificial Intelligence and Fraud Detection

Recently, the use of artificial intelligence in the fight against fraud has helped achieve an unprecedented level of success in detecting fraudulent activity. The idea is basically to fight fire with fire; if cybercriminals can use advanced tech to defraud the system, the same knowledge should be used to develop systems that can keep crooks out.

The idea of implementing AI-based models is to basically detect and predict identity theft and other scams commonly used by criminals to compromise financial institutions. The concept of big data comes useful herein. Since banks and financial institutes have on hand large amounts of customer data as well as transactional data, it can be used productively to predict patterns in data and look for any irregularities. This can make financial fraud detection a much easier feat for the BFSI industry.

Use of AI in Identity Verification Services

More than that, AI can now be used to detect fraudulent pursuits by enabling businesses to implement identity verification measures to authenticate the IDs of customers. Shufti Pro is a such an AI-based identity verification software that provides an array of Know Your Customer (KYC) services through an AI-based SaaS. It has made significant headway into developing fraud prevention techniques that enable the banking sector to put up sizable defences against online fraud and cybercrime.

Shufti Pro is currently providing the best identity theft protection services in the market. It provides fraud prevention services through an AI-based authentication system that verifies a user’s ID in under a minute. It is supported globally and has universal language support in its system. Not only that, its restful API enables banks, financial institutes and online retailers to integrate their web-based applications and modules without any downtime.

Fraud detection and Artificial Intelligence together have the potential to transform the future of financial fraud detection and has already made significant headway into it.

Augmanted Intelligence Kyc

How Augmented Intelligence is next stop in ID Verification Services?

Augmented intelligence (AI), also referred to as intelligence augmentation (IA) and cognitive augmentation, is next level in Artificial Intelligence, fine tuning the overall automation process for different categories of tech industry including ID Verification services. Some skeptics believe that augmented intelligence will do away with human intelligence but in essence it is an effective way to make humans work in a refined environment with better productivity and trackable results.

From a purely academic standpoint, Augmented Intelligence is describe how normal human intelligence is supplemented through the use of technology. Over the years, we have seen technology supporting the daily work routines and even in some cases, social life of human beings through internet, software modules, social media and many other means. Now with concrete and results driven R&D at the helm, tech companies have been launching apps, softwares and programming modules that are making use of augmented intelligence to give an unprecedented boost to overall productivity of human beings. ID verification services are also another category of IT based services that stand to benefit from augmented intelligence.

Augmented Intelligence via Multiple Platforms

There are multiple platforms used by millions of users to gain access into social media website, their bank accounts, availing service from a ride sharing service and buying virtual currency from online exchanges among many other online tasks. Some prefer iOS based mobile devices, others are more inclined to use their Windows based Personal computers. So a product utilising augmented intelligence must also have a multichannel support so that an across the board access is available for a worldwide audience. Shufti Pro is one such product that believes on providing seamless identity verification services to its customers and augmented intelligence is cornerstone of the technology being utilised in Shufti Pro. It is supplementing the verification process with Artificial & Human Intelligence Hybrid.

The makers behind Shufti Pro also envisioned an effortless verification regime in which medium of verification never becomes a hurdle in the verification process itself. Shufti Pro easily integrates with pre-existing manuals and applications. API and SDK integration are available for Shufti Pro that are updated on regular basis in order to make the integration process hassle free for entire clientele of Shufti Pro. So, whether it is a Windows PC, Apple iOS or any smartphone with Android based mobile OS, Shufti Pro’s augmented intelligence works perfectly without any discrepancy in performance standards.

Augmented Intelligence and ID Verification Services

Thanks to advances in the fields of cloud computing and mobility, we are generating and storing huge amounts of data. Processing that data to collect concrete information and verifiable credentials is core of ID verification services like Shufti Pro.

With hundreds of verifications required to be performed in any given second across the globe, the urgency given to Identity verification services is understandable. Only Augmented Intelligence can perform lightning quick verifications assisting human intelligence to skillfully validate each credential, document or personal detail provided by a potential client. In the absence of augmented intelligence, Identity verification services will take hundreds of man-hours and an unimaginable labour force to check each credential. This is the reason why Shufti Pro is not just a run of the mill Artificial Intelligence based solution but it also has the tendency of reducing the workload for human DEOs through augmented intelligence. Machine learning algorithms of Shufti Pro enable it to perform ID verification within 30-60 seconds processing time as well, setting new records in ID verification category.

Shufti Pro’s augmented intelligence backed verification services are must have product not only for banking organizations or financial institutions but for every business that is under the danger of being defrauded by identity theft or doctored credentials. KYC services from Shufti Pro are just one part of Identity verification services offered by this new age technology. It also offers AML Compliance services using enhanced modes of augmented intelligence that again helps institutions and online businesses to offset any financial risks that a potential customer or transaction can pose for them in future.

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