INDUSTRIES will need to adopt artificial intelligence (AI) to deter fraud, with scams becoming more sophisticated, according to Fintech Alliance.PH.
“For you to compete head-on with fraudsters, you need to use AI because with the volume of transactions, you need a more secure automated way to filter them, to check if transactions are suspicious… the best way to track that is (to have the capacity to handle volume),” CIS Bayad Center, Inc. President and Chief Executive Officer and Fintech Alliance.PH Trustee Lawrence Y. Ferrer told reporters on the sidelines of a forum last week.
He said AI has made fraud more complicated to deal with, requiring not only the latest technology but also coordination between regulators and industry.
“With the advent of AI, the level of sophistication in defrauding customers increases significantly. Fraudsters are highly organized. The way to combat them is for the whole industry to band together, to share information, and to provide both education… and improved security,” he said.
“Security requires also using the tools available on the market. So AI is definitely a powerful tool to protect customers.”
“When you take a look at the industry data, there’s a notable increase in the way money is (brought out) by fraudsters. They have to move money… outside the Philippines. We all know for a fact that the easiest or the most accessible mechanism (to bring out money) is online gaming,” Mr. Ferrer said.
He added that e-wallets have become a preferred touchpoint for scammers to defraud consumers, citing a study by the Global Anti-Scam Alliance that showed 73% of Filipino respondents sent money to scammers through digital wallets.
“Just remember, banks are primarily brick and mortar, physical stores. When you want to apply for a bank account, you have to physically go to a bank, most of the time. However, for digital wallets, you do it online. So the ease of applying creates that level of vulnerability. It’s a level more fraudsters can access,” he said.
He also noted that the use of e-wallets has increased despite know-your-customer protection systems.
“(Dealing with to a bank) requires you to be physically present and provide your physical identification. On the other hand, for wallets (the process is) digital. You have the convenience of using your mobile phone to register your details,” he said.
“The barrier to entry is easier for fraudsters because of accessibility… Digital is obviously easier compared to over-the-counter.” — Aaron Michael C. Sy