The fight against cybercrime and financial scams goes on and on. The fraudsters get cleverer by the day, but the financial sector and the banking sector are doing a pretty good job keeping up. Both sides use new technologies such as Artificial Intelligence, but now the fraudsters face a new weapon – global cohesion between multiple entities in the sector.
At Nexi Group, which owns Danish Nets and is today one of Europe’s largest players in payment solutions – The European PayTech – they naturally keep an eye on the developments in how both consumers and businesses are increasingly, and in ever more advanced ways, being swindled and defrauded. It may seem like a hopeless fight, but according to Sean Neary, who is Head of Fraud Risk Management Services at Nexi Group, there is no reason to fear that the battle is lost in advance.
“There is no doubt that we have experienced a paradigm shift within IT fraud driven by the changes we are seeing not least through Artificial Intelligence. Fraud is ocurring on such a large industrial scale today that it would be completely naive to think we can eradicate it. It will be there going forward, but the good news is that we, who fight it, have just as good tools at our disposal as the fraudsters,” says Sean Neary.
“Just because a fraudster is turned away at one door doesn’t mean he gives up. On the contrary, he will try many other doors, and therefore it is important that we have the opportunity to exchange information to uncover patterns and history so that all doors remain closed.”
Sean Neary, Head of Fraud Risk Management Services in Nexi Group
We have to fight seamlessly
It is in fact a never-ending battle, but the battle is by no means lost. It’s rather about adopting new technologies first, and here Artificial Intelligence will play a big role. As Sean Neary puts it, “We are in a spike of innovation due to the exponential growth of generative AI and because it has been made publicly available. Today it is a commodity everyone can afford, so it is a continuous scheme, where the advantage and strong hand will constantly swing from one side to the other.”
“Technology is an advantage for both sides in such a battle, but first of all, we have to fight cybercrime in a seamless way that doesn’t annoy customers by making it harder and more complicated to perform online financial transactions. Secondly, the financial sector and the banking sector are heavily regulated, while the fraudsters are not, making it a bit trickier for us to make use of the full potential of new technologies. We have a lot of issues to consider,” Sean Neary continues.
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New markets open for fraud
At the same time, he sees another challenge. In all markets Banks and financial institutions have become more willing to take responsibility in connection with fraud, making it easier for customers to cover potential losses. Sean Neary is somewhat concerned that this might cause consumers to think less about how they should act online to avoid being scammed. Whether the number of cases of financial fraud online is increasing can be debated, but the number undoubtedly rises and falls in tandem with who is leading the arms race.
“The amount of fraud varies from country to country and from region to region. This is partly because some markets have been easier for fraudsters to conquer than others. For example, the English market has been accessible, while the Nordic market, including Denmark, has been more difficult due to linguistic challenges in particular. But thanks to Artificial Intelligence and Machine Learning, this has now changed. Local demographic challenges have become easier to overcome through technology,” Sean Neary continues.
United we stand across the sector
Regardless of how user behaviour may develop in the future, he has no doubt that the financial sector and banks’ increased sense of responsibility is for the greater good. But he also emphasizes that no sector can solve the challenge alone. Every layer and every actor, from individual web shops to global banks, must work together, and here a technology like Artificial Intelligence becomes a crucial factor. It is about accumulating information to understand often very complex risk scenarios.
“Just because a fraudster is turned away at one door doesn’t mean he gives up. On the contrary, he will try many other doors, and therefore it is important that we have the opportunity to exchange information to uncover patterns and history so that all doors remain closed. In this area, we have an advantage over the fraudsters, namely the ability to accumulate knowledge across both types of trade and types of transactions. You could almost call it a form of distributed cybersecurity,” Sean Neary evaluates.
Checkout the Podcast: Nexi Talks: Payment Fraud
The best weapon is cooperation
He doesn’t hesitate to call modern fraud in the financial sector brute force that must be fought with all means. One of these, in his view, is cohesion between multiple entities to a degree we haven’t seen before. The cooperation is not only national but global, which is also necessary with the many new types of channels on social media through which financial services are offered. The dialogue between providers and customers is constantly expanding, which has also meant that the telecom industry has now seriously entered the security work.
“The risk of experiencing fraud has exploded, just as both fraudsters and technology have improved, making the potential fraud market much more addressable and accessible. The effort has largely become industrialized in an attempt to maximize profits. Therefore, as I mentioned earlier, it is a continuous fight against fraudsters, but the battle is by no means lost. The biggest risk would be if the financial sector and the banking world do not understand how to coordinate their efforts. That would worry me,” concludes Sean Neary.
Understanding and Preventing Deception
Our podcast miniseries – Nexi Talks: Payment Fraud – brings you insights from those who know payment fraud best, speaking to a range of experts on current trends and challenges within the world of payments and security.
Listen now to understand the fast-changing threats coming your way and learn what you can do to prevent deception during the intensifying battle with fraudsters.
