Adding biometric weapons to the anti-fraud arsenal

Johannesburg, 31 Mar 2021
Read time 4min 40sec
Simon Marchand, CFE, Chief Fraud Prevention Officer, Nuance Communications.
Simon Marchand, CFE, Chief Fraud Prevention Officer, Nuance Communications.

The disruptions we’ve experienced as a result of the COVID-19 pandemic have the potential to create a “perfect storm” for fraud.

According to the US Association of Certified Fraud Examiners, the changes in the way people work and live has created opportunities for cyber criminals to exploit. Simply the increase in online engagement alongside an increase in phishing and other cyber threats have raised the potential for people to fall victims to cyber crime.

“2020 saw rapid shifts in how fraudsters operate. Just like we had to adapt our work processes, fraudsters changed where and how they attacked organisations to maintain high levels of profitability,” says Simon Marchand, Chief Fraud Protection Officer at Nuance Communications.

Marchand explains that new technologies, such as crypto-currencies, and the dark Web have allowed criminal groups to be more agile and more specialised in their activities. Cyber criminal syndicates have grown in their sophistication and form a larger ecosystem and clamping down on one part won’t permanently disrupt the entire syndicate.

All organisations have had to step up their efforts to combat these new forms of attack, looking to leverage new tools to protect their customers, assets and reputation, as well as improve customer satisfaction. Moving quickly to adapt to new fraud trends has become crucial for organisations hoping to stay ahead of increasingly inventive fraudsters.

Tacking local challenges

“In South Africa, two-thirds of losses were related to card-not-present (CNP) fraud before the pandemic,” says Marchand. “The measures such as lockdowns will have had an impact on how fraudsters perpetrate their crimes, driving CNP fraud up. This change in fraud attack vectors, combined with the necessary shift to work from home operations is driving interest for biometrics technology.

“More organisations are looking at voice biometrics and comprehensive platforms to secure their authentication process and strengthen their fraud detection capabilities,” he adds. “Biometrics have proven themselves to be faster and more reliable than traditional authentication methods, assisting in protecting agents from social engineering. Biometrics-based fraud detection is also faster, and more effective, and South African enterprises are accelerating its adoption to head-off future challenges.”

Biometric technologies have become a powerful solution in the fraud prevention toolbox. These technologies include an array of potential applications, ranging from fingerprints and facial recognition to behavioural and conversational traits and, of course, voice biometrics. These measures are deployed using devices that the user has access to, such as a smartphone, or can be completely device-agnostic – such as voiceprints.

“For fraud prevention teams biometrics offer the capability to do customer authentication, fraud prevention, fraud detection, and investigation of events, reducing the chance of fraudulent activity at each step of the customer journey,” he comments.

Moving beyond passwords and other forms of knowledge-based authentication (KBA) is a vital step in securing organisations.

“KBA is, frankly, worthless given the vast amounts of information that’s been exposed on the dark Web. PINs can be easily guessed, passwords are too easily forgotten, and out-of-wallet questions can represent an unnecessary barrier to legitimate customers. Recent research we conducted revealed that about two-thirds of data breaches have happened because weak or stolen passwords have been exploited,” he says.“The use of biometrics allows organisations to go ‘password free’, delivers a more sophisticated, frictionless customer experience, and enables faster, more secure authentication with less customer effort.”

Preventing fraud – proactively – with biometrics

Fraud prevention often entails a focus on suspicious transactions – identifying them, acting on them, and understanding how they were actioned. However, this puts fraud teams on a reactive footing and moving from this to a proactive stance requires artificial intelligence-powered biometrics that can analyse and flag suspicious individuals in real-time. Voice biometrics play an important part in this process as they can, within seconds, determine if an agent is speaking with a fraudster.

Likewise, conversational biometrics can be used to create a customer or agent profile, including speech patterns and word choices, traits that are unique to each individual and can’t be replicated by fraudsters. In cases of fraud-for-hire call centres or mules, this technology is particularly adept at determining suspicious interactions from previously unknown fraudsters.

Leveraging biometrics to detect fraud

AI fraud detection is a relatively new part of the anti-fraud arsenal. Biometrics can be used to determine the channel and geographic location of the user’s device while also analysing network quality to detect any suspicious changes. Using these and other anti-spoofing technologies, such as detection of synthetic speech and new threats like deep fakes, organisations are in a much better position to detect and therefore help prevent fraudsters from gaining access to accounts and data.

An integrated approach to protect customers, assets and reputations

“As we look toward a future that features more virtual and remote work, virtual and digital security and fraud prevention measures will become increasingly critical. Biometric technologies, when added to the virtual toolbox, create powerful mechanisms for preventing, detecting and investigating fraud in ways that protect customers, assets and organisational reputations,” he concludes.

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