{"id":10543,"date":"2024-02-26T15:44:15","date_gmt":"2024-02-26T15:44:15","guid":{"rendered":"https:\/\/fintech.global\/regtech100\/?p=10543"},"modified":"2024-02-26T15:44:15","modified_gmt":"2024-02-26T15:44:15","slug":"how-can-regtechs-help-to-combat-document-fraud","status":"publish","type":"post","link":"https:\/\/fintech.global\/regtech100\/how-can-regtechs-help-to-combat-document-fraud\/","title":{"rendered":"How can RegTechs help to combat document fraud?"},"content":{"rendered":"

One of the most pressing issues with the financial industry right now is document fraud. How can RegTech\u2019s tackle this challenge and provide more support?<\/strong><\/p>\n

In the view of Joe Lemonnier, product marketing manager at\u00a0Resistant AI<\/a>, The financial industry stands at a critical juncture, facing a surge in\u00a0document<\/span>\u00a0fraud<\/span>\u00a0driven by rapid technological advancements, one closely tied to the industry\u2019s swift adoption of\u00a0document<\/span>\u00a0automation technologies.<\/p>\n

He said, \u201cWhile these innovations promise efficiency and scalability, they inadvertently open the floodgates to sophisticated\u00a0document<\/span>\u00a0fraud<\/span>\u00a0tactics. In this context, RegTech firms are indispensable, but to succeed in combating this growing threat, they need to transcend traditional boundaries between customer and provider.\u201d<\/p>\n

According to the product marketing manager, the financial sector\u2019s race towards digital transformation \u2013 particularly in document processing \u2013 has set the stage for elevated\u00a0document<\/span>\u00a0fraud<\/span>\u00a0risks. Technologies such as IDP and LLMs, designed to streamline operations, which were never built for high-risk environments where manipulation is common, are now being exploited by\u00a0fraud<\/span>sters, making large-scale\u00a0document<\/span>\u00a0fraud<\/span>\u00a0not just a possibility but a growing reality.<\/p>\n

\u201cWe\u2019ve documented the growing trend of automated serial document fraud\u00a0to show that this situation demands a critical reassessment of our approach to\u00a0document<\/span>\u00a0security and\u00a0fraud<\/span>\u00a0prevention,\u201d said Lemonnier.<\/p>\n

In order to effectively combat document fraud, however, Lemonnier believes that document fraud detection solutions alone are insufficient. \u201cA key aspect often overlooked by financial entities is the establishment of a comprehensive\u00a0document<\/span>\u00a0compliance or risk policy. This policy must reflect the organization\u2019s specific risk appetite, as without it, the deployment of risk-based automation workflows remains directionless. RegTechs need to play a crucial role here, not merely as solution providers but as strategic advisors helping institutions formulate and implement these vital policies,\u201d he said.<\/p>\n

To provide an example of how this works in action, Lemonnier highlighted Resistant AI\u2019s collaboration with Payoneer. \u201cOperating in an intensely competitive global market, the teams in Payoneer faced the herculean task of onboarding merchants worldwide. This undertaking involves managing an enormous volume of\u00a0document<\/span>s, encompassing a wide variety of languages and formats, and navigating diverse regulatory and risk environments.\u201d<\/p>\n

In his view, their partnership was crucial in addressing such challenges, not just in enhancing their ability to validate documents efficiently, despite complexities arising from the diversity of volume of documents, but also in\u00a0establishing a clear framework for defining their\u00a0document<\/span>\u00a0risk appetite and developing strategies that match it. The advanced solutions provided by Resistant AI enabled Payoneer to maintain swift onboarding times and cost efficiency, while ensuring robust\u00a0fraud<\/span>\u00a0prevention measures.<\/p>\n

He concluded, \u201cThis kind of outcome requires a shift in how financial institutions perceive RegTechs\u2014and how Regtechs perceive themselves. They can no longer be content in playing the role of vendor, selling technology and letting their customers hope for the best.<\/p>\n

\u201cInstead, they must be considered part of the team\u2014specialists onboarded to help the institutions in their journey towards\u00a0fraud<\/span>\u00a0prevention. And similarly, financial institutions should expect and demand more from Regtechs if they are going to get the most out of the incredible tech that is now available to them.\u201d<\/p>\n

The importance of technology\u00a0<\/strong><\/p>\n

Emil Kongelys, chief technology officer of\u00a0Muinmos<\/a>, believes that technology will play a key role in this fight against document fraud.<\/p>\n

He exclaimed, \u201cIn today\u2019s world of AI, we are now seeing perfect deep fakes of\u00a0document<\/span>s, not only in static files but also in live video streams, where even during a live video call, it would not be detected.<\/p>\n

\u201cRegTechs work with cutting edge technologies able to detect such type of\u00a0fraud<\/span>, focusing on points of interest that may not even be visible to the human eye. One could say things went half circle \u2013 if before\u00a0document<\/span>s were too poor quality for machines to verify, but the human eye could; now forged\u00a0document<\/span>s have become too sophisticated for the human eye, and only machines can verify them!\u201d<\/p>\n

To Kongelys, this makes the use of technological solutions even more important these days than before.<\/p>\n

Chor Teh, financial crime compliance industry practice lead at\u00a0Moody\u2019s Analytics<\/a>, also commented, \u201cDocument<\/span>\u00a0fraud<\/span>\u00a0or forgery is one of the most persistent forms of\u00a0fraud<\/span>, ranging from fake passports to false legal\u00a0document<\/span>ation, but these capabilities have evolved with the advent of generative AI. Those without the correct expertise can be easily fooled by seemingly convincing\u00a0document<\/span>s generated by a language model.<\/p>\n

\n

\u201cAt this point in time, there is no sufficient technology that can determine when a\u00a0document<\/span>\u00a0has been generated by AI or not, so compliance teams and RegTech\u2019s must employ other methods. Automating compliance workflows and risk screening enables compliance teams to make the best informed decisions.<\/p>\n

\u201cIf an entity onboarding to a business exhibits potentially risky activity, access to real time data may prompt compliance teams to examine potentially\u00a0fraud<\/span>ulent\u00a0document<\/span>s, helping to prevent\u00a0fraud<\/span>\u00a0from taking place.\u201d<\/p>\n

Copyright \u00a9 2024 RegTech Analyst<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

One of the most pressing issues with the financial industry right now is document fraud. How can RegTech\u2019s tackle this challenge and provide more support? In the view of Joe Lemonnier, product marketing manager at\u00a0Resistant AI, The financial industry stands at a critical juncture, facing a surge in\u00a0document\u00a0fraud\u00a0driven by rapid technological advancements, one closely tied […]<\/p>\n","protected":false},"author":4,"featured_media":10544,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"\nHow can RegTechs help to combat document fraud? - RegTech100<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fintech.global\/regtech100\/how-can-regtechs-help-to-combat-document-fraud\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How can RegTechs help to combat document fraud? - RegTech100\" \/>\n<meta property=\"og:description\" content=\"One of the most pressing issues with the financial industry right now is document fraud. How can RegTech\u2019s tackle this challenge and provide more support? 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