Friday's Final Word | week 45
Welcome to Fourthline's weekly newsletter, where we share insights, developments, and the latest news to help keep you sharp! Enjoy ???
?? Meet the Frankenstein of KYC
?? KYC comes to Coinbase, on-chain
?? Mastercard to verify payments by smiling
?? The mistakes that cost banks billions each year
????Cyprus Confidential - Russian Money in Cyprus
???3 Anti-Fraud Trends in 2024
?? To regulate or not to regulate – EU vs AI
Meet synthetic identity fraud, the Frankenstein of KYC
Fraudulent identities are hardly ever merely imaginary identities, built from scratch and that’s it. As Alex Tonella points out in a very creative analogy, synthetic identity fraud is rather similar to that of the project of Mary Shelley where her Frankenstein is snatched together using components of real human beings. Tackling synthetic identity fraud is a complicated story exactly for the same reasoning – because the resulting fake identities are an amalgamation of both false and genuine information pieces. The created montage does very well when evading being detected because often the addresses and names used belong to real human beings. Demonstrating the success of the technique, just in the USA, synthetic identity fraud is expected to lead to $5 billion in losses in the coming year. The one way forward – enhancing KYC with additional screenings.
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Coinbase launches KYC verification on-chain?
KYC is not only coming to the crypto industry, but it is moving on-chain, with Coinbase announcing that it is soon going to be ready to allow over 100M users to attest to account and country credentials on it’s Layer 2 network called Base. When implemented, this will enable a decentralized entity to become mainstream while maintaining increased levels of security. This approach will not only solve the issue of KYC in the crypto sphere but will do it in a way that it doesn’t compromise transparency, something that is at the heart of the industry’s basic appeal.
Read full article?here
Mastercard is launching biometric verification for payments
Imagine a world where you can just pay with a smile on your face. Okay, it’s a bit contradictory as the moment to open your wallet is probably the worst part of shopping, but this might soon change as Mastercard is piloting into verifying payments with smiling. The location is Brazil, and the project is a collaboration between Mastercard and NEC Corporation with the purpose of implementing biometrics and liveness detection in order to improve the experience during the in-store payment journey. The program will enable customers to verify payments by waving or smiling, making the experience rather similar to liveness checks during the digital onboarding. Amongst the benefits are a happy customer base and shortened queues as smiling is quicker than failed pin code fills. ?
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领英推荐
What mistakes stand behind the hefty fines banks have to pay year after year?
Following the news on banks receiving hefty fines from regulators, one could rightly come to the conclusion that being penalized is the ordinary way of doing business as a financial institution. Just 2022 alone saw over $8 billion worth of fines imposed by scrutinizing state officials enforcing AML regulations. However, a recent report by Beyond FS finds that being fined is not an inevitable cost but a failure on banks’ ends to execute proper AML controls. Amongst the roadblocks are poor project management, an inadequate closure process, and the underestimating attitude towards implementing a regulatory program. If banks were to heed these recommendations and pay attention to the findings of the report, then maybe coming years would see fewer and smaller penalties imposed by financial regulators. The question that remains is whether the industry is willing to respond.
Cyprus confidential – how Russians use Cyprus to hide their money
While the EU and America is sanctioning Russian oligarchs and their companies for the country’s atrocities in Ukraine, Cyprus, an EU country, has been revealed to safely guard Russian riches. These findings came to light through a cache of 3,6m files that was leaked to the International Consortium of Investigative Journalists (ICIJ), and now is known as Cyprus Confidential. Amongst the revelations are stories around the Cyprus arm of PwC, the British football club Chelsea FC, and an influential German journalist. In the wake of these findings, Cyprus is making pledges to better control its financial industry, however, it seems that it is overall transparency in financial transactions that should be achieved globally because as long as money can hide, there will be those who will evade scrutiny.
Three Anti-Fraud Trends to Watch in the Coming Year
Fraudsters and scammers are once again becoming creative, returning to older, in-person methods while simultaneously unleashing the power of the newest technologies, amongst them AI with ChatGPT at the lead. Further complicating the story is the sophisticated ways fraudsters organize their activities, dividing labor amongst those extracting the data and those making use of it, leading to a crime ecosystem which is gradually resembling a full-fledged industry. For financial institutions to stay ahead in the game, improvements will have to be made from accelerated AI adoption to enhanced-fraud detection techniques because otherwise the danger is there that 2024 will become a year of increased losses and pain. However, as a recent consumer study by SAS finds, consumers are more than willing to cooperate as long as any changes made to the user experience from authentication delays to biometrics is done in order to curtail fraudulent activities. This is good news for the financial sphere, because with their customers’ backing, leaning into investing in fraud protection already seems less complicated.
Read full article?here
To regulate, or not to regulate, that is the question – How Europe is still confused about its stance on AI
Is the EU risking falling behind in the AI competition by trying to impose AI regulations or is regulating the advancement of technological innovation a necessary step towards a future where AI can coexist peacefully with the human population? Based on recent moves, it seems that both France and Germany are falling out of love with the idea of exerting control, citing the need for unhindered innovation to foster European technological breakthroughs. However, in his opinion piece, Dr Kris Shrishak argues that opting for deregulation might lead in the opposite direction, exposing the EU to Chinese and American competition, and the dangers unrestrained AI development might pose. Regulation on the other hand can enable the European region to reap the rewards of AI in a responsible way that benefits society as a whole, not just the big tech companies spearheading the current innovation.
Read full article?here
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