The transition of our financial interactions to the digital realm has paved the way for fraud, with the risk level escalating to a point of crisis, according to experts. New technological means are furnishing opportunistic swindlers with a choice of channels to execute their offences, says Colm O’Flaherty, the Director of Financial Crime at Deloitte.
“Technological advancements have propelled malicious actors towards unprecedented speeds, offering them greater covert presence and facilitating trans-border operations via online platforms and cryptocurrencies, thus complicating tracing and capture procedures,” O’Flaherty elucidates.
AI and machine learning, he asserts, have empowered criminals to initiate multifaceted frauds and stunt operations through varied communication modes such as texts, phone calls, emails, and social media in mere seconds. These cutting-edge progressions are also enabling intricate operations like innovative malware and refined social engineering strategies that play on the vulnerabilities of our progressively digital existence.
He points out that “Individuals with limited tech proficiency are particularly susceptible as they broach online banking, e-commerce, or even social media, all of which can be manipulated by criminals.”
Even those proficient in identifying scams can struggle to pinpoint them, given the considerable amount of personal data that has been harvested by corporations and/or illicitly accessed via data breaches. This readily-accessible data can be exploited by malefactors to personalise their attacks.
Frankie Cronin, a business risk partner at Grant Thornton, declares that even essential technology lets criminals “mechanise and mass-produce” fraud campaigns against individuals, causing a colossal surge in such deceptions.
“It’s astounding what can be achieved with a mere few clicks,” Cronin mentions.
Despite being tech-savvy or vigilant, one can still easily fall victim to the sort of sophisticated cons that are currently achievable. Cronin accentuates that criminals are capitalising on AI to tailor their attacks in a more individualised manner.
“They are procuring public information about the individual and using it to fabricate a familiar conversation,” he explains. Alarmingly, AI is also being utilised to mimic and imitate people’s voices.
Cronin has witnessed numerous instances where a person’s voice is duplicated and used to make voice notes for others, often making financial requests. The individual on the receiving end commonly falls for the trick, believing it truly is the person they think it is.
Still, technology is proving to be a vital tool in thwarting financial crime. Improved tracking and surveillance systems allow banks and regulatory agencies to identify suspicious activities in real time, thereby curtailing fraudulent transactions. As pointed out by O’Flaherty, technology can also bolster the security of your accounts with banking institutions, retailers, and other service providers. Advances in biometric verification, multi-factor authentication and digital ID confirmation tools make it increasingly difficult for criminals to illegally access accounts.
Cronin, however, acknowledges that while numerous banks are pouring resources into adopting these technologies, the general public tends to lag behind fraudsters in this regard. The rapid evolution of technology often means that the fight against financial crime can be overshadowed by the machinations of criminals. “The process of adopting these technologies typically takes years, and often by the time they are up and running, they’re already outdated,” Cronin adds.
O’Flaherty concurs with Cronin’s sentiment, noting that the crime fighters often feel like they’re contending with one hand tied behind their backs. Criminals aren’t hindered by legal constraints and are quick to exploit new technologies and find any possible loopholes. On the other hand, setting up new protective measures – whether drafting new laws or rolling out novel technologies – can be a time-consuming process for governments, regulatory bodies, and companies, sometimes taking several months or even years. This situation perpetuates a feeling of always being a few steps behind.