November 26, 2024 • 19 mins
Identity fraud is evolving at lightning speed, driven by advancements in AI technology. Join us as Dana Porter from Au10tix shares groundbreaking insights from their Global Identity Fraud Report, revealing a dramatic rise in cyber threats and highlighting the alarming use of AI-powered bots in social media. Guided by Ian Horne and Scarlett Sieber, we uncover the nuances between 'slow burn' and 'sudden burst' fraud attacks and how AI is turbocharging these threats. Delving into the rise of deepfakes, we explore the complex challenges this technology poses for identity verification, making it easier for criminals to manipulate identities in real-time and outpace traditional security measures.
The conversation doesn’t stop there. We tackle the vital role of regulation and enforcement in fighting back against these persistent threats, especially in the crypto and payments sectors. Dana sheds light on the transformative effect of the 2023 MiCA regulation in Europe, which has succeeded in curtailing fraud in crypto markets by imposing stricter customer onboarding practices. We also explore Interpol's global operations that disrupt organized crime, alongside innovative solutions like decentralized identity and verifiable credentials. For both consumers and businesses, practical strategies to increase security are shared, emphasizing the importance of constant vigilance and multi-layered defense systems rather than relying solely on regulatory frameworks. Tune in for invaluable insights into securing your digital identity in a rapidly changing landscape.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ian Horne (00:07):
Hello and welcome to the Money Pot.
I'm Ian Horne, head of Contentfor Europe at Money 2020.
And today's episode is allabout identity fraud and
deepfakes, so maybe don't takethat at face value.
In today's episode, we'rejoined by Dana Porter, Strategy
and Product Executive at Au10tix, who, as many of you will know,
are in the business of identityverification and risk
(00:28):
management and have justproduced the latest edition of
their Global Identity FraudReport.
We host this episode at a wildtime for ID and verifications.
It's becoming easier and easierfor fraudsters to rip off your
identity.
Social media is rife with botsand artificial intelligence, and
automation allows scammers toscam the hell out of you at
light speed.
Sounds like a good time to be afraudster, to be honest, but if
(00:50):
you're a fraudster who happensto be an avid listener to the
Money Pot, I'm hoping we candampen your day just a little.
It's not just me and Dana onthe microphone today.
I'm joined by Money 2020's veryown Scarlett Sieber, our
fearless leader and chiefstrategy and growth officer and
your co-host for the day.
Scarlett, good to have you withus.
It feels like a big deal tohave you here, so I'm either
(01:12):
doing something right or you'vebeen asked to rein in my usual
nonsense, but please don'tanswer that I'm going to
introduce Dana very quickly, butfirst welcome and let's take a
glance at this report, scarlett.
Are there any key findings thatreally stand out to you?
Scarlett Sieber (01:28):
There definitely is, Ian, and again,
thank you so much for having me.
Obviously, I'm a very large fanof The Money pot, back from
inception in 2019, when I wassitting with Rachel Morrissey in
a room together, and thisbecame a reality, and I very
rarely get to be part of it.
So why am I here?
Yes, of course, because of yourintellect and charm, Ian.
But bigger than that, we havenew and interesting data, which
(01:49):
you know.
I love.
Numbers, especially new numbers,and of course, we have the
powerhouse that is Donna to betalking about this Identity
fraud big topic right now.
We see it across all of ourshows, even leading up into
Vegas coming very shortly.
But two stats to the questionthat you asked, two stats that
really stuck out to me from thereport Social media top of my
(02:09):
mind, I've got young childrenthinking about what the future
of that world looks like forthem and social media rose three
times the amount of maliciousactivity happening on social
media three times since lastquarter.
That is a big change.
And not only that 32% of allinternet traffic was malicious
bot driven, which is terrifying,and you know if I didn't
(02:30):
already have sleepless nights.
They have now been exacerbatedby some of these data points.
Ian Horne (02:34):
Yeah, it is actually slightly terrifying, isn't it?
It's a fascinating report andwe're going to dive into it.
So, dana, you've been reallypatient here.
First, let's bring you in, dana, welcome to the Money Pot.
And quickly, very quickly, letus know about your role at
Authentics.
As Scarlett says, you're apowerhouse here, so talk us
through what you do.
Dana Porter (02:52):
Thanks for having me guys.
First thing, good morning AtAuthentics.
You know we're, as youmentioned, an IDV powerhouse and
I am looking at strategy,product and marketing and seeing
how we can stay ahead of all ofthese killer trends that we're
seeing in this very activeindustry that Scarlett just
mentioned.
Thank you for that, donna.
Scarlett Sieber (03:11):
Obviously, I gave a few statistics from the
report, but more broadly, thisis something that you wake up
every day probably thinkingabout, and can you give us an
idea of the scale of identityfraud for our listeners?
And more broadly, we know thatpeople don't really understand
what's going on, so just give usan idea of the true scale of
what's happening here withidentity fraud.
Dana Porter (03:30):
So I want to start with what you just said,
scarlett.
If you think, about 32% of allinternet traffic is bot
generated, that's quite scary.
And now if a third of all thatbot generated traffic is
actually malicious so that'saccording to a recent Forbes
survey and the reason this scaleis so big is because of
(03:51):
something that we're callingimpersonation bots, which are,
in essence, computers mimickinghuman behavior.
Now that's causing a burst infraud, and we've kind of
separated them into two types offraud that we're seeing in them
, two types of attacks.
(04:11):
One type of attack is what wecall the slow burn, so they're
taking a document ID and youhave maybe under 2,000
permutations of that samedocument, compared with what we
call a sudden burst, whereyou're seeing a single document
with over 20,000 permutations.
The analogy I like to do withthat is the slow burn is someone
at the cashier Every daythey're taking a candy bar and
(04:31):
sticking it into their handbagversus a sudden burst, which is
Bonnie and Clyde coming in withguns, blazing into the bank,
taking everything they can andthen disappearing can and then
disappearing.
So I think, with AI and all ofthese trends, we're seeing more
and more of these types ofactivities that people really
need to watch out for.
Ian Horne (04:51):
Yeah, and AI basically means we can do the
turbo speed right.
I mean, just how much exactlyhas that accelerated the numbers
of fraud attacks?
Dana Porter (05:00):
Oh, I think it's dramatic.
It's dramatic and you know,when we say AI, ai is enabling
both the fraudsters, like yousaid in your opening, as well as
the people who are protectingagainst that, and the evolution
of AI is actually going intodeep fake right.
So if in the past, we had thesefraudsters sitting in their
garage and just changing thedate of birth so that I can buy
(05:23):
alcohol in your local store,well now obviously this is
progressing and it's not justchanging the field in my
document ID.
The next step is changing thepicture my face.
The step after that is changingthe animated picture of my face
so that I can pass a livenesstest, and the next step after
that is full-pledged avatarsthat can pass as being yourself.
(05:45):
So I think where we're headingwith this is what we're calling
the industrialization of fraudgenerative tools that are
maturing so that capableprofessionals and I don't mean
experts, I'm deliberately sayingjust capable professionals can
start using generative AI tomultiply perfectly misleading
(06:07):
fraud attempts and that canimpact industries, nations and
entire global markets.
Ian Horne (06:13):
Yeah, and quick just to add on this how good are
deepfakes getting right now?
Because we talk about AI andsometimes artificial
intelligence gives us reallyconvincing good things, but then
also I'm a content creator insome respects, I see some really
bad stuff of AI too.
So when it comes to deep fakes,how accurate are they right now
?
Dana Porter (06:32):
So you know they're okay.
They're okay but not great.
So you can see in our reportsthat when looking at the types
of fraud that we're stoppingtoday, still 10 times more
attempts are in document fieldsor pictures and less in the
areas of videos or selfies.
And why is that?
(06:53):
Because we are very, very goodat stopping selfies, because
when you've got all theseliveness technologies out there,
they're still not quite there,but we can.
Honestly, we can't rest on ourlaurels because we see that the
pace of AI technology adoptionis just so quick that I think we
need.
This is a true problem andwe're obviously.
It's keeping us up at night andwe're updating our technologies
(07:16):
literally on a daily basis.
Very, helpful.
Scarlett Sieber (07:19):
You know, I one of the things that I think a
lot about and I wrote a book onit was around embedded finance,
and I've actually hadconversations with Ron, the
founder of Authentics, aboutthat, about this, in the past
and it kind of has to be part ofthis conversation.
As an industry, we're at apoint where transactions are
made essentially seamlessly andas quickly as possible and the
industry is moving more and more.
(07:39):
How do we make that even moreseamless?
How do we make that even morequick?
But, of course, when you havethings that move forward and you
get this more seamlessexperience, there is a bigger
challenge and opportunity forpeople who are trying to take
advantage of that around safety,especially around payments and
identity verification.
So, donna, I would love to hearfrom your perspective Do you
believe that we can ever trulyget to a place where
(08:01):
transactions are completelyimmediate or is part of the
safety of it, by having a littlebit of resistance there?
Will there always be a layer ofauthentication for the customer
?
Dana Porter (08:13):
So, scarlett, I think you've said it there's a
constant trade-off betweenhaving the best customer
experience and securing fraud.
I think there's honestly, Ithink there will forever be need
to be some sort of trade-off.
The way to go about it is,first of all, make sure that
you're masking the complexity ofeverything that you're doing
(08:34):
from the consumer.
We pride ourselves that we'vereached a point that, with the
right processes and the rightlevel of automation, you can
actually, just within seconds,still make sure you have the
right identity.
How do you do that Is that youmake sure that your systems in
the background.
They can check any document,any language, any geography.
(08:54):
On top of that, add a layer thatchecks beyond the individual
transaction, looks across anyfraud patterns that you've seen
across multiple companies, whatwe call the multi-layer and in
order to do that so quickly,obviously you need to leverage
AI.
I think that's one leg.
The second leg obviously willbe that, as we go further into
digital ID and verifiablecredentials and we can talk
(09:16):
about that a little bit laterthat would also help create a
seamless customer experience.
One last point I want tomention here is that we always
talk about the end consumer, butthere's another person we need
to be looking at which is theservice provider employee.
It's getting so hard for theservice provider to meet up with
the regulation.
Ian Horne (09:35):
to make sure that they comply, to make sure that
they can see across all thefraud happening in real time and
deliver customer experiencethat one of our focus is to make
sure that those people are alsohaving a good customer, a good
experience from a fraudperspective, oh for sure, and
we're going to pick up onregulation in a bit.
(09:56):
But I want to go back to thatsocial media kind of angle that
we discussed at the start of thepodcast, because we know deep
fakes are everywhere now, ofvarious quality, and we see the
impact of bots, especially onsocial media, in the current US
election cycle, for instance Infact we've seen it in several
elections prior to that globally.
It's not just a US thing, right?
So if we know that a largeportion of social media accounts
are bots or at the very leastpeople making kind of cheap
(10:19):
pseudonyms or whatever, how canwe easily identify a bot account
?
Are there like obvious tellsthat they?
Dana Porter (10:26):
have.
So, first of all, social mediais a huge problem.
You know, just last year therewere 259 million new social
media accounts.
Oh my God, that's a numberthat's just staggering.
That means there's a new userevery eight seconds.
Our reports show that withinour serial fraud monitor
activity, 16% of allfraud-related attempts were from
(10:49):
social media.
Now, in the past this was justanecdotal, right, you could say
you were going to on a date andyou thought this guy was X and
he ended up being Y because itwas a fraudulent account.
But now there's actually muchbigger implication.
There are monetary implicationsfor fake social media accounts.
First of all, they create afake persona that gives them
(11:09):
credibility, which allows themto create fraud within the
social media platform.
But it's not just that.
Once they can obtain either asocial security number or PII
information, they can actuallyalmost behave like a bot
doppelganger and create muchbigger financial impact.
Much bigger financial impact.
(11:34):
So what do we do, I think, froma human perspective?
Well, you can go into thataccount.
You can see if the picture, ifthe account doesn't have
pictures, or if they'repromising millions of dollars in
five minutes, clearly there's afake.
Our belief is that it'simpossible to go in and to take
a fake just by looking at it.
Our view is you have to preventthese accounts from being
created.
So what we do, as we sit asgatekeepers in the beginning and
(11:57):
with our serial fraud monitors,we look across all of the
accounts, we look for patternrecognition, we look for fraud
patterns that we see and weprevent these accounts from
being created to begin with.
Ian Horne (12:10):
Yeah, I mean.
One thing I'll quickly jump inhere with is people have talked
for years about social mediaplatforms being used for
payments, and you were sayingjust about embedded finance
potentially getting to a pointwhere you know we can verify who
the person is and then haveseamless payments, right, Do you
think that might be the keytowards making social media more
(12:31):
verifiable by building paymentsinto it, or is that a step too
far?
Do you think we'll ever getthere?
Dana Porter (12:37):
Well, I think we're already seeing payments
embedded somehow into socialmedia.
People are getting paid onsocial media.
You've got buyers and sellerson Instagram and TikTok, which
is why we're seeing the fraudcreeping very fast into those
places.
I think we're going to beseeing more and more of that
happening.
Exactly how Time will tell.
Scarlett Sieber (12:55):
I'd be remiss, Donna, not to talk about when
we're thinking about things likefraud and identity, not to
bring in regulation here.
Of course, as an Americansitting here I'm now in London,
but generally in the USregulation is top of mind
recently and do you believe thatregulation materially improves
the situation as it relates toidentity fraud, Because
(13:16):
obviously there's a lot ofopportunities there and, if so,
which regulations in particulardo you believe have been the
most notable?
Dana Porter (13:22):
And, if so, which regulations in particular do you
believe have been the mostnotable?
So nobody likes regulation.
The slogans are it stiflesinnovation and creativity, etc.
But our view that in our fieldit actually does have an impact.
We've seen both crypto andpayments combined decrease by
roughly 10 percent in terms ofthe number of fraud attempts,
(13:45):
and we think that part of thereason for that is regulation
and enforcement.
And maybe let me give you acouple of examples.
Meca is the regulation that wasintroduced for crypto in 2023 in
Europe.
Before that was introduced,this was a very unregulated
industry and basically anyoneanonymous could participate in
trading platforms, leaving themwide open for fraudsters to take
advantage.
(14:06):
Once this was introduced in Q2last year, there was an
immediate decrease of about 50%the following quarter, so you
could see the immediate impact.
What Mika sought to do was toadd the rigor of customer
onboarding that you see inbanking into crypto.
Unfortunately, because Bitcoinprices have risen so much, we're
(14:28):
now seeing fraud.
Everybody's like bees to thehoney.
They're back into crypto, sowe're seeing that rise again.
But that was actually onereally good example.
I will say that the other sideof regulation is enforcement,
and we've seen Interpol sort ofdo a crackdown of disrupting
organized crime.
They did this big thinginvolving 61 countries at the
(14:50):
end of the last year and big ofQ1 this year.
They froze 6,000 accounts andyou saw the payments industry
really decline because of thatinvolvement.
So in my mind, both regulationand enforcement have a
significant role in decreasingfraud.
Ian Horne (15:07):
You mentioned the crypto kind of decline in fraud,
which is in some ways expected.
Those who obviously aren't intocrypto probably don't expect
that.
What did make the bigdifference?
Are you sure it?
Was it just regulation, or isit more the fad element of it,
you know?
Are you finding that basicallyfraud follows market cycles and
things like that?
Is that how this works?
Dana Porter (15:26):
I think fraud is opportunistic.
So when there was a crackdownin one place, then the
fraudsters went elsewhere.
So the minute Mika wasintroduced in Europe, we saw a
decline until they almost satand thought about it what's the
next big thing?
How can we do?
They went elsewhere.
Ian Horne (16:00):
Then again Bitcoin.
When the price was so lucrativethey came something like
decentralized identity or someother thing we could do that
would stop us from constantlyplaying cat and mouse or
fraudsters.
Dana Porter (16:09):
So, you know, at an industry perspective, we know
that things like verifiablecredentials it's something that
we were very involved withhelping Microsoft set up, for
example, and I know there'svarious solutions out there or
the introduction of digital IDs,the notion is that you have a
higher level of authenticationwith verifiable credentials.
The idea is verify once, usemany bring back the power to
(16:33):
consumers to decide who theywant to share their identity
with and how.
So those things, I think, arereally good news for our
industry.
I just think they're going totake longer and longer to adopt
In the short term.
There are a lot of things thatyou can do on a personal level,
and that's where we Authenticscome in.
Our advice is to adopt solutionsthat are very heavily reliant
(16:58):
on AI.
And you know, for us atAuthentics, we started out our
business in the airport securitybusiness, which is probably the
strictest level of securitythat you have, and then we took
that know-how into the IDVbusiness and we think you need
to be constantly thinking ofwhat else that you can add to
(17:19):
IDV.
It's not a single check, it'sbiometrics, it's PII personal
information, it's AML, it'sadding the power of the group on
top of it.
So we have our consortium wherepeople sharing fraud patterns
between them.
So I think our advice is tomake sure you're partnering with
the best solution out there tomake sure that you're protected.
Scarlett Sieber (17:47):
Very helpful, very helpful, donna, and you did
not disappoint with even morestats than I started off with.
So lots of interesting andterrifying numbers that were
shared there.
If we just end with and yougave a little bit of this just
now.
But could you just elaborate alittle bit?
As someone who is sitting onthe other side of this, feeling
a little bit more anxious maybethan when we started this
conversation, can you give somepractical tips for our broader
(18:08):
listeners?
What is the best way to protectyourself, whether you be the
end consumer or you talked abouta bit earlier, you know that
that business.
What are some of the bestthings that you can do?
Dana Porter (18:19):
So let's start a second from an end consumer
perspective.
You know the saying justbecause you're paranoid doesn't
mean they're not after you.
It's almost like I want to addthat word of caution for an end
consumer.
You should be aware you shouldbe looking out when you're it's
on social media, but everywhereyou're getting a link.
I mean think before you click.
Think before you share yourdata.
It is getting harder.
(18:41):
Before you click, think beforeyou share your data.
It is getting harder.
People are out to get you inthis world and you should be
more suspicious than you were inthe past.
Our main business is withcorporations, with businesses,
and for them our piece of adviceit's almost we think they
should self-regulate.
Don't just wait for theregulators to tell you what you
have to do.
There's so much at stake here.
Right, it's your money, butit's also your reputation.
(19:03):
If you let your fraudsters in,then there's so much for you to
be dealing with.
So our advice is make sureyou're applying multiple layers
of defense, make sure you're ontop of it, you're having the
right partners and that you'reconstantly improving your
gatekeepers in letting peopleinto your business.
Ian Horne (19:21):
Brilliant.
Thank you, dana, and I lovethat.
That's very much on the frontfoot and proactive, which is
great.
Anyway, thank you again forjoining us, dana.
That's it for this episode ofthe Money Pot.
We want to thank Dana Porterfor being an authentic and
verifiable presence on the showtoday Also a valuable one, and
don't forget, you can be part ofthe Money Pot too.
Please send us pitches topodcast at money2020.com and
(19:45):
don't forget to follow uswherever you listen to podcasts.
Thank you for listening.
Hello and welcome to the Money Pot.
I'm Ian Horne, head of Contentfor Europe at Money 2020.
And today's episode is allabout identity fraud and
deepfakes, so maybe don't takethat at face value.
In today's episode, we'rejoined by Dana Porter, Strategy
and Product Executive at Au10tix, who, as many of you will know,
are in the business of identityverification and risk
(00:28):
management and have justproduced the latest edition of
their Global Identity FraudReport.
We host this episode at a wildtime for ID and verifications.
It's becoming easier and easierfor fraudsters to rip off your
identity.
Social media is rife with botsand artificial intelligence, and
automation allows scammers toscam the hell out of you at
light speed.
Sounds like a good time to be afraudster, to be honest, but if
(00:50):
you're a fraudster who happensto be an avid listener to the
Money Pot, I'm hoping we candampen your day just a little.
It's not just me and Dana onthe microphone today.
I'm joined by Money 2020's veryown Scarlett Sieber, our
fearless leader and chiefstrategy and growth officer and
your co-host for the day.
Scarlett, good to have you withus.
It feels like a big deal tohave you here, so I'm either
(01:12):
doing something right or you'vebeen asked to rein in my usual
nonsense, but please don'tanswer that I'm going to
introduce Dana very quickly, butfirst welcome and let's take a
glance at this report, scarlett.
Are there any key findings thatreally stand out to you?
Scarlett Sieber (01:28):
There definitely is, Ian, and again,
thank you so much for having me.
Obviously, I'm a very large fanof The Money pot, back from
inception in 2019, when I wassitting with Rachel Morrissey in
a room together, and thisbecame a reality, and I very
rarely get to be part of it.
So why am I here?
Yes, of course, because of yourintellect and charm, Ian.
But bigger than that, we havenew and interesting data, which
(01:49):
you know.
I love.
Numbers, especially new numbers,and of course, we have the
powerhouse that is Donna to betalking about this Identity
fraud big topic right now.
We see it across all of ourshows, even leading up into
Vegas coming very shortly.
But two stats to the questionthat you asked, two stats that
really stuck out to me from thereport Social media top of my
(02:09):
mind, I've got young childrenthinking about what the future
of that world looks like forthem and social media rose three
times the amount of maliciousactivity happening on social
media three times since lastquarter.
That is a big change.
And not only that 32% of allinternet traffic was malicious
bot driven, which is terrifying,and you know if I didn't
(02:30):
already have sleepless nights.
They have now been exacerbatedby some of these data points.
Ian Horne (02:34):
Yeah, it is actually slightly terrifying, isn't it?
It's a fascinating report andwe're going to dive into it.
So, dana, you've been reallypatient here.
First, let's bring you in, dana, welcome to the Money Pot.
And quickly, very quickly, letus know about your role at
Authentics.
As Scarlett says, you're apowerhouse here, so talk us
through what you do.
Dana Porter (02:52):
Thanks for having me guys.
First thing, good morning AtAuthentics.
You know we're, as youmentioned, an IDV powerhouse and
I am looking at strategy,product and marketing and seeing
how we can stay ahead of all ofthese killer trends that we're
seeing in this very activeindustry that Scarlett just
mentioned.
Thank you for that, donna.
Scarlett Sieber (03:11):
Obviously, I gave a few statistics from the
report, but more broadly, thisis something that you wake up
every day probably thinkingabout, and can you give us an
idea of the scale of identityfraud for our listeners?
And more broadly, we know thatpeople don't really understand
what's going on, so just give usan idea of the true scale of
what's happening here withidentity fraud.
Dana Porter (03:30):
So I want to start with what you just said,
scarlett.
If you think, about 32% of allinternet traffic is bot
generated, that's quite scary.
And now if a third of all thatbot generated traffic is
actually malicious so that'saccording to a recent Forbes
survey and the reason this scaleis so big is because of
(03:51):
something that we're callingimpersonation bots, which are,
in essence, computers mimickinghuman behavior.
Now that's causing a burst infraud, and we've kind of
separated them into two types offraud that we're seeing in them
, two types of attacks.
(04:11):
One type of attack is what wecall the slow burn, so they're
taking a document ID and youhave maybe under 2,000
permutations of that samedocument, compared with what we
call a sudden burst, whereyou're seeing a single document
with over 20,000 permutations.
The analogy I like to do withthat is the slow burn is someone
at the cashier Every daythey're taking a candy bar and
(04:31):
sticking it into their handbagversus a sudden burst, which is
Bonnie and Clyde coming in withguns, blazing into the bank,
taking everything they can andthen disappearing can and then
disappearing.
So I think, with AI and all ofthese trends, we're seeing more
and more of these types ofactivities that people really
need to watch out for.
Ian Horne (04:51):
Yeah, and AI basically means we can do the
turbo speed right.
I mean, just how much exactlyhas that accelerated the numbers
of fraud attacks?
Dana Porter (05:00):
Oh, I think it's dramatic.
It's dramatic and you know,when we say AI, ai is enabling
both the fraudsters, like yousaid in your opening, as well as
the people who are protectingagainst that, and the evolution
of AI is actually going intodeep fake right.
So if in the past, we had thesefraudsters sitting in their
garage and just changing thedate of birth so that I can buy
(05:23):
alcohol in your local store,well now obviously this is
progressing and it's not justchanging the field in my
document ID.
The next step is changing thepicture my face.
The step after that is changingthe animated picture of my face
so that I can pass a livenesstest, and the next step after
that is full-pledged avatarsthat can pass as being yourself.
(05:45):
So I think where we're headingwith this is what we're calling
the industrialization of fraudgenerative tools that are
maturing so that capableprofessionals and I don't mean
experts, I'm deliberately sayingjust capable professionals can
start using generative AI tomultiply perfectly misleading
(06:07):
fraud attempts and that canimpact industries, nations and
entire global markets.
Ian Horne (06:13):
Yeah, and quick just to add on this how good are
deepfakes getting right now?
Because we talk about AI andsometimes artificial
intelligence gives us reallyconvincing good things, but then
also I'm a content creator insome respects, I see some really
bad stuff of AI too.
So when it comes to deep fakes,how accurate are they right now
?
Dana Porter (06:32):
So you know they're okay.
They're okay but not great.
So you can see in our reportsthat when looking at the types
of fraud that we're stoppingtoday, still 10 times more
attempts are in document fieldsor pictures and less in the
areas of videos or selfies.
And why is that?
(06:53):
Because we are very, very goodat stopping selfies, because
when you've got all theseliveness technologies out there,
they're still not quite there,but we can.
Honestly, we can't rest on ourlaurels because we see that the
pace of AI technology adoptionis just so quick that I think we
need.
This is a true problem andwe're obviously.
It's keeping us up at night andwe're updating our technologies
(07:16):
literally on a daily basis.
Very, helpful.
Scarlett Sieber (07:19):
You know, I one of the things that I think a
lot about and I wrote a book onit was around embedded finance,
and I've actually hadconversations with Ron, the
founder of Authentics, aboutthat, about this, in the past
and it kind of has to be part ofthis conversation.
As an industry, we're at apoint where transactions are
made essentially seamlessly andas quickly as possible and the
industry is moving more and more.
(07:39):
How do we make that even moreseamless?
How do we make that even morequick?
But, of course, when you havethings that move forward and you
get this more seamlessexperience, there is a bigger
challenge and opportunity forpeople who are trying to take
advantage of that around safety,especially around payments and
identity verification.
So, donna, I would love to hearfrom your perspective Do you
believe that we can ever trulyget to a place where
(08:01):
transactions are completelyimmediate or is part of the
safety of it, by having a littlebit of resistance there?
Will there always be a layer ofauthentication for the customer
?
Dana Porter (08:13):
So, scarlett, I think you've said it there's a
constant trade-off betweenhaving the best customer
experience and securing fraud.
I think there's honestly, Ithink there will forever be need
to be some sort of trade-off.
The way to go about it is,first of all, make sure that
you're masking the complexity ofeverything that you're doing
(08:34):
from the consumer.
We pride ourselves that we'vereached a point that, with the
right processes and the rightlevel of automation, you can
actually, just within seconds,still make sure you have the
right identity.
How do you do that Is that youmake sure that your systems in
the background.
They can check any document,any language, any geography.
(08:54):
On top of that, add a layer thatchecks beyond the individual
transaction, looks across anyfraud patterns that you've seen
across multiple companies, whatwe call the multi-layer and in
order to do that so quickly,obviously you need to leverage
AI.
I think that's one leg.
The second leg obviously willbe that, as we go further into
digital ID and verifiablecredentials and we can talk
(09:16):
about that a little bit laterthat would also help create a
seamless customer experience.
One last point I want tomention here is that we always
talk about the end consumer, butthere's another person we need
to be looking at which is theservice provider employee.
It's getting so hard for theservice provider to meet up with
the regulation.
Ian Horne (09:35):
to make sure that they comply, to make sure that
they can see across all thefraud happening in real time and
deliver customer experiencethat one of our focus is to make
sure that those people are alsohaving a good customer, a good
experience from a fraudperspective, oh for sure, and
we're going to pick up onregulation in a bit.
(09:56):
But I want to go back to thatsocial media kind of angle that
we discussed at the start of thepodcast, because we know deep
fakes are everywhere now, ofvarious quality, and we see the
impact of bots, especially onsocial media, in the current US
election cycle, for instance Infact we've seen it in several
elections prior to that globally.
It's not just a US thing, right?
So if we know that a largeportion of social media accounts
are bots or at the very leastpeople making kind of cheap
(10:19):
pseudonyms or whatever, how canwe easily identify a bot account
?
Are there like obvious tellsthat they?
Dana Porter (10:26):
have.
So, first of all, social mediais a huge problem.
You know, just last year therewere 259 million new social
media accounts.
Oh my God, that's a numberthat's just staggering.
That means there's a new userevery eight seconds.
Our reports show that withinour serial fraud monitor
activity, 16% of allfraud-related attempts were from
(10:49):
social media.
Now, in the past this was justanecdotal, right, you could say
you were going to on a date andyou thought this guy was X and
he ended up being Y because itwas a fraudulent account.
But now there's actually muchbigger implication.
There are monetary implicationsfor fake social media accounts.
First of all, they create afake persona that gives them
(11:09):
credibility, which allows themto create fraud within the
social media platform.
But it's not just that.
Once they can obtain either asocial security number or PII
information, they can actuallyalmost behave like a bot
doppelganger and create muchbigger financial impact.
Much bigger financial impact.
(11:34):
So what do we do, I think, froma human perspective?
Well, you can go into thataccount.
You can see if the picture, ifthe account doesn't have
pictures, or if they'repromising millions of dollars in
five minutes, clearly there's afake.
Our belief is that it'simpossible to go in and to take
a fake just by looking at it.
Our view is you have to preventthese accounts from being
created.
So what we do, as we sit asgatekeepers in the beginning and
(11:57):
with our serial fraud monitors,we look across all of the
accounts, we look for patternrecognition, we look for fraud
patterns that we see and weprevent these accounts from
being created to begin with.
Ian Horne (12:10):
Yeah, I mean.
One thing I'll quickly jump inhere with is people have talked
for years about social mediaplatforms being used for
payments, and you were sayingjust about embedded finance
potentially getting to a pointwhere you know we can verify who
the person is and then haveseamless payments, right, Do you
think that might be the keytowards making social media more
(12:31):
verifiable by building paymentsinto it, or is that a step too
far?
Do you think we'll ever getthere?
Dana Porter (12:37):
Well, I think we're already seeing payments
embedded somehow into socialmedia.
People are getting paid onsocial media.
You've got buyers and sellerson Instagram and TikTok, which
is why we're seeing the fraudcreeping very fast into those
places.
I think we're going to beseeing more and more of that
happening.
Exactly how Time will tell.
Scarlett Sieber (12:55):
I'd be remiss, Donna, not to talk about when
we're thinking about things likefraud and identity, not to
bring in regulation here.
Of course, as an Americansitting here I'm now in London,
but generally in the USregulation is top of mind
recently and do you believe thatregulation materially improves
the situation as it relates toidentity fraud, Because
(13:16):
obviously there's a lot ofopportunities there and, if so,
which regulations in particulardo you believe have been the
most notable?
Dana Porter (13:22):
And, if so, which regulations in particular do you
believe have been the mostnotable?
So nobody likes regulation.
The slogans are it stiflesinnovation and creativity, etc.
But our view that in our fieldit actually does have an impact.
We've seen both crypto andpayments combined decrease by
roughly 10 percent in terms ofthe number of fraud attempts,
(13:45):
and we think that part of thereason for that is regulation
and enforcement.
And maybe let me give you acouple of examples.
Meca is the regulation that wasintroduced for crypto in 2023 in
Europe.
Before that was introduced,this was a very unregulated
industry and basically anyoneanonymous could participate in
trading platforms, leaving themwide open for fraudsters to take
advantage.
(14:06):
Once this was introduced in Q2last year, there was an
immediate decrease of about 50%the following quarter, so you
could see the immediate impact.
What Mika sought to do was toadd the rigor of customer
onboarding that you see inbanking into crypto.
Unfortunately, because Bitcoinprices have risen so much, we're
(14:28):
now seeing fraud.
Everybody's like bees to thehoney.
They're back into crypto, sowe're seeing that rise again.
But that was actually onereally good example.
I will say that the other sideof regulation is enforcement,
and we've seen Interpol sort ofdo a crackdown of disrupting
organized crime.
They did this big thinginvolving 61 countries at the
(14:50):
end of the last year and big ofQ1 this year.
They froze 6,000 accounts andyou saw the payments industry
really decline because of thatinvolvement.
So in my mind, both regulationand enforcement have a
significant role in decreasingfraud.
Ian Horne (15:07):
You mentioned the crypto kind of decline in fraud,
which is in some ways expected.
Those who obviously aren't intocrypto probably don't expect
that.
What did make the bigdifference?
Are you sure it?
Was it just regulation, or isit more the fad element of it,
you know?
Are you finding that basicallyfraud follows market cycles and
things like that?
Is that how this works?
Dana Porter (15:26):
I think fraud is opportunistic.
So when there was a crackdownin one place, then the
fraudsters went elsewhere.
So the minute Mika wasintroduced in Europe, we saw a
decline until they almost satand thought about it what's the
next big thing?
How can we do?
They went elsewhere.
Ian Horne (16:00):
Then again Bitcoin.
When the price was so lucrativethey came something like
decentralized identity or someother thing we could do that
would stop us from constantlyplaying cat and mouse or
fraudsters.
Dana Porter (16:09):
So, you know, at an industry perspective, we know
that things like verifiablecredentials it's something that
we were very involved withhelping Microsoft set up, for
example, and I know there'svarious solutions out there or
the introduction of digital IDs,the notion is that you have a
higher level of authenticationwith verifiable credentials.
The idea is verify once, usemany bring back the power to
(16:33):
consumers to decide who theywant to share their identity
with and how.
So those things, I think, arereally good news for our
industry.
I just think they're going totake longer and longer to adopt
In the short term.
There are a lot of things thatyou can do on a personal level,
and that's where we Authenticscome in.
Our advice is to adopt solutionsthat are very heavily reliant
(16:58):
on AI.
And you know, for us atAuthentics, we started out our
business in the airport securitybusiness, which is probably the
strictest level of securitythat you have, and then we took
that know-how into the IDVbusiness and we think you need
to be constantly thinking ofwhat else that you can add to
(17:19):
IDV.
It's not a single check, it'sbiometrics, it's PII personal
information, it's AML, it'sadding the power of the group on
top of it.
So we have our consortium wherepeople sharing fraud patterns
between them.
So I think our advice is tomake sure you're partnering with
the best solution out there tomake sure that you're protected.
Scarlett Sieber (17:47):
Very helpful, very helpful, donna, and you did
not disappoint with even morestats than I started off with.
So lots of interesting andterrifying numbers that were
shared there.
If we just end with and yougave a little bit of this just
now.
But could you just elaborate alittle bit?
As someone who is sitting onthe other side of this, feeling
a little bit more anxious maybethan when we started this
conversation, can you give somepractical tips for our broader
(18:08):
listeners?
What is the best way to protectyourself, whether you be the
end consumer or you talked abouta bit earlier, you know that
that business.
What are some of the bestthings that you can do?
Dana Porter (18:19):
So let's start a second from an end consumer
perspective.
You know the saying justbecause you're paranoid doesn't
mean they're not after you.
It's almost like I want to addthat word of caution for an end
consumer.
You should be aware you shouldbe looking out when you're it's
on social media, but everywhereyou're getting a link.
I mean think before you click.
Think before you share yourdata.
It is getting harder.
(18:41):
Before you click, think beforeyou share your data.
It is getting harder.
People are out to get you inthis world and you should be
more suspicious than you were inthe past.
Our main business is withcorporations, with businesses,
and for them our piece of adviceit's almost we think they
should self-regulate.
Don't just wait for theregulators to tell you what you
have to do.
There's so much at stake here.
Right, it's your money, butit's also your reputation.
(19:03):
If you let your fraudsters in,then there's so much for you to
be dealing with.
So our advice is make sureyou're applying multiple layers
of defense, make sure you're ontop of it, you're having the
right partners and that you'reconstantly improving your
gatekeepers in letting peopleinto your business.
Ian Horne (19:21):
Brilliant.
Thank you, dana, and I lovethat.
That's very much on the frontfoot and proactive, which is
great.
Anyway, thank you again forjoining us, dana.
That's it for this episode ofthe Money Pot.
We want to thank Dana Porterfor being an authentic and
verifiable presence on the showtoday Also a valuable one, and
don't forget, you can be part ofthe Money Pot too.
Please send us pitches topodcast at money2020.com and
(19:45):
don't forget to follow uswherever you listen to podcasts.
Thank you for listening.
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