Synthetic Identity, AI and Incoming Mandates

• Real time payments are increasing exponentially, yet faster payments also mean faster fraud. How can financial institutions effectively tackle this paradox?
  
  
• To what extent and how are real time payments threatened by social engineering that allows funds to be sent to mule accounts held by synthetic or stolen identities?
  
  
• What do sending and receiving banks need in order to detect and prevent authorised push payment (APP) scams in real time, without deferring to using non-digital, real-time methods of payment like cash?
  
  
• How is the UK’s PSR boosting performance while ensuring banks look in the right direction for risk mitigation?
  
  
• How important are mature fraud, risk and AML measures?

An increased number of mandates are incoming. Regulators across the world are considering the true definition of accountability and allocating liability to the right stakeholder, while also protecting the customer, preventing fraud, and supporting real-time payments.

In 2025, customer onboarding can no longer be embedded with friction and customer churn cannot be as a result of APP scams.

The solution? Collaboration and education through information sharing between financial institutions. With legislation being a hot topic in 2024, banks will be under pressure in 2025 to leverage technology and share data to form industry-wide fraud intelligence to educate other organisations about emerging threats.

Federated machine learning, for instance, real time profiling of transaction risk enriched with network intelligence across the ecosystem can be effective and pin-point anomalies in real-time , ensuring other types of scams such as phishing or romance scams are detected and prevented .

In addition to new techniques, banks must utilise Confirmation of Payee, AML and KYC initiatives that continue to work for other types of payments, and use ISO 20022 and open source data to bolster these tools to eradicate accounts created with synthetic or stolen identities.

Sign up for this Finextra webinar, hosted in association with ACI, to join our panel of industry experts who will explore how real time payments are threatened by social engineering.