Author

Dan Brightmore

Published

3 January 2025

Estimated Read time

4Mins

Glenn Fratangelo, Head of Fraud Product Marketing & Strategy at NICE Actimize, on financial services fraud prevention in 2025.

2024 marked a turning point in financial crime management with the advent of Generative AI (GenAI). McKinsey estimates GenAI could add a staggering $200-340 billion in annual value to the global banking sector. A potential revenue boost of 2.8 to 4.7%. This underscores the transformative potential of GenAI. IT IS rapidly evolving from a futuristic concept to a powerful tool in the fight against financial crime. However, 2024 was just the prelude. 2025 promises to be the year GenAI truly comes into its own. Unlocking transformative capabilities in combating increasingly sophisticated threats. 

This evolution is not merely desirable, it is essential. The Office of National Statistics (ONS) reported a concerning 19% year-over-year increase in UK consumer and retail fraud incidents in 2024, reaching approximately 3.6 million. This stark reality underscores the urgent need for financial institutions (FIs) and banks to bolster their defences against financial crime. In 2025, leveraging the power of GenAI is no longer a luxury, but a necessity for protecting customers and safeguarding the financial ecosystem. 

The evolving GenAI-powered fraud landscape

Fraudsters have embraced GenAI as a potent weapon in their arsenal. This technology’s ability to create realistic fakes, automate attacks and mimic customers creates a significant threat to the financial landscape.

Deepfake technology has become a particularly insidious tool. By generating highly realistic voice and facial fakes, fraudsters can bypass remote verification processes with ease. This opens doors to unauthorised access to sensitive information, enabling account takeovers and other fraudulent activities.  

In addition, the rise of synthetic identities further complicates the challenge. By blending real and fabricated data, fraudsters can create personas that seamlessly infiltrate legitimate customer profiles. These synthetic identities are extremely difficult to detect, as they appear indistinguishable from genuine customers. Making it challenging for institutions to differentiate between legitimate and fraudulent activities.

Phishing scams have also undergone a dramatic evolution, becoming more sophisticated and personalised. AI-driven techniques allow fraudsters to craft personalised, convincing emails that mimic legitimate communications, resulting in significant data breaches.

Harnessing GenAI

GenAI is being used by criminals – presenting a significant challenge in the realm of fraud. It requires advanced AI capabilities such as real-time behavior analytics that use machine learning to continuously analyse all entity interaction and transaction patterns. This can identify subtle deviations from a customer’s typical behaviour. It allows for initiative-taking and the flagging of suspicious activity before any damage occurs. Moreover, providing a significant advantage over traditional, rigid rule-based systems that often fail to detect nuanced threats.

Fraud simulation and stress testing using GenAI can also empower institutions to proactively assess the resilience of their systems. By simulating potential fraud scenarios, financial institutions can identify vulnerabilities and train detection models to recognise emerging tactics. Furthermore, this proactive preparation ensures that defences remain ahead of fraudsters’ evolving methods, creating a more robust and adaptable security infrastructure.

Low volume high value fraud, such as BEC or other large value account to account transfers usually lack the quantity of data needed to optimise models. GenAI can address this by creating synthetic data that mimics real-world scenarios. This approach significantly improves the accuracy and robustness of detection models, making them more effective against new and unforeseen threats.

GenAI has the potential to transform the investigation process by automating tasks such as generating alerts and case summaries, as well as SAR narratives. This automation not only minimises errors but also frees analysts from mundane tasks, allowing them to focus on higher-value activities. The result is a significantly accelerated financial crime investigation process, enabling institutions to respond to threats with greater speed and efficiency.

The battle against fraud in 2025 and beyond

The battle against financial fraud in 2025 and beyond is an undeniable arms race. Fraudsters, wielding generative AI as their weapon, will relentlessly seek to exploit vulnerabilities. To counter this evolving threat, financial institutions must embrace AI to outmanoeuvre fraudsters and proactively protect their customers.

The future of fraud and financial crime prevention hinges on our ability to innovate and adapt. Institutions that view GenAI not just as a challenge, but as an opportunity, will emerge as leaders in this fight. AI is a force multiplier for institutions striving to combat fraud and financial crime, empowering them with smarter, faster, and more adaptive defences, we can create a more secure and trustworthy financial ecosystem. The choice to innovate in the face of adversity will define the path forward and shape the future.

  • Artificial Intelligence in FinTech

Author

Dan Brightmore

Published

10 December 2024

Estimated Read time

5Mins

Join FinTech’s greatest event when Money20/20 Europe returns to Amsterdam’s RAI Arena June 3-5 2025

FinTech Strategy is proud to be a media partner for Money20/20 Europe 2025.

Launched by industry insiders in 2011, Money20/20 is the heartbeat of the global fintech ecosystem. Some of the most innovative, fast-moving ideas and companies have found their feet (and funding) on its show floor. From J.P. Morgan, Stripe, and Airwallex to HSBC, Deutsche Bank, and Checkout.com.

Furthermore, this is where you’ll find new connections, business-critical insights from inspirational speakers, innovation, and partnerships you need to ensure your business succeeds for whatever comes next in money.

Why Money20/20?

FinTech Strategy spoke with a host of leaders from across the FinTech spectrum. They all agreed on one thing, Money20/20 Europe is ‘the’ place to make connections and build your business.

Gurdeep Singh Kohli, Founder, SC Ventures

“It’s the first time I’ve attended Money 20/20 and, we’ve had some fascinating impromptu conversations that will lead to great opportunities. All the big names are here and it’s clearly a popular event from a thematic perspective – payments is a big theme this year. I have a very high regard for the quality of what’s on offer and the way the event has been organised – it’s a great customer experience, the way it’s all been structured, at scale, is actually one of the best I’ve ever seen. The response has been fantastic…”

Stephen Everett, MD Payables & Receivables, Lloyds Banking Group

“The majority of people at Money20/20 genuinely get up in the morning with a growth and innovation mindset. Therefore, you have to balance and recognise that when you walk into this big venue that there will be some wacky ideas. From my experience, I have seen many infant ideas turn into successful ventures, whereas I have also seen some ventures becoming unsuccessful despite having great innovation ideas. Fintechs will fail. Innovation will fail. Experiments will fail. And that’s fine. That’s what Money20/20 is all about.”

Michelle Prance, CEO, Mettle (NatWest Group)

“It’s good for Mettle to come here because we are a fintech that was incubated inside a large bank (NatWest) for fintechs. Quite often their route to market, route to capitalisation, is by going into a main bank being acquired. So, it’s that marriage between a big organisation and the small nimble fintech. People are really interested in what we’re doing because big incumbents want to be fast and nimble. They don’t always have the capital to invest in something like we’ve been able to do with Mettle. So, they’re interested to know the right route to go down. Do they incubate in house? Or do they buy it in? And what’s the right way to do that without killing the culture? These are the types of interesting conversations we’ve been having here.”

Ryan O’Holleran, Head of Sales, AirWallex

“The great thing about Money20/20, here in Europe, and in Asia and the US, is the good division between buyers and sellers. So, you have all these service providers like AirWallex, Amex, Stripe… And then you have the Heads of Payments from companies like Booking.com, Minted and Summit who are coming here with their team to meet with providers. If you think about that from a sales perspective, those meetings are very hard to get outside of this environment. But over a week you get 15 different meetings each day with that would normally take months to arrange. So, the ROI from this week is really powerful just from being able to have these conversations.”

Merusha Naidu, Global Head of Payments, Paymentology

“Paymentology is homegrown out of the UK so it’s important for us to make sure we’re representing the business across Europe. This is the centre of the world for banking innovation. We have customers here from Singapore, Dubai, Saudi Arabia, Ghana and beyond. People look to this event to really learn about what’s happening in the industry globally and discover what trends are going to come up. What should we be doing? How can we innovate together and learn from each other? That’s one of the things I really love about Money20/20; the talks in all of the panels are so interesting and I always leave knowing more. Being in the payments industry, and especially being an issue processor, it’s important for us to learn from the industry and understand where we need to move so that we can stay at the forefront of developments.”

Zak Lambert, Product Lead & Europe Lead, Plaid                                                                            

“This is my sixth straight Money20/20 and it gets busier every year! It’s great to learn more about the ecosystem at large. You can see developing trends each year, and it’s always a little bit different. You build relationships at Money20/20 that stay with you for the rest of your life. And it’s a perfect opportunity to meet people in the flesh that you might normally only see on screen. You can get a pretty direct read on what they’re working on and it’s exciting to be here making new connections.”

Book Your Money20/20 Europe Pass Now

To get a flavour of what you can expect from next year’s conference check out our review of Money20/20 Europe 2024.

Book your pass now and save €200 with the code FTS200.

  • Artificial Intelligence in FinTech
  • Digital Payments
  • InsurTech
  • Neobanking

Author

Ozge Celik

Published

20 November 2024

Estimated Read time

4Mins

Ozge Celik, Head of Product at Turkey’s largest FinTech Papara, on how personalisation is making everyday financial transactions more manageable and embedded into our lifestyles

With unlimited choice from a global marketplace, customer expectations are continuing to reach new heights. Undeniably, we are seeing financial services – being led by the FinTech sector – undergoing a seismic shift towards personalisation and catering to this new form of demand. Users are no longer content with generic services. Furthermore, they want tailored, hyper personalised experiences that reflect their individual needs and preferences. This is particularly true for their banking experiences. Yet, many traditional banking institutions are struggling to keep up with these demands due to their legacy systems and traditional cookie-cutter approach. Whereas the FinTech industry, with its agile frameworks and state-of-the-art technologies, is demonstrating its capability to rapidly position solutions that cater to this demand.

The growing trend for personalisation

Personalisation in consumer services is not a novel concept, but its application within the financial sector is a relatively recent development. Despite its infancy, its impact on the industry is profound. Banking has always been a cornerstone of our daily lives, from withdrawing cash to transferring funds. As such, it is unsurprising that users increasingly view their financial services as an extension of their personal identity.

Over the past decade, we have seen the introduction of customisable physical bank cards, personalised digital tools on mobile banking apps and instant messaging services. Banks and fintechs are striving to meet users’ needs, reshaping the loyalty landscape that has traditionally favoured established banks. These institutions, with their often rigid and cumbersome systems, are being compelled to re-evaluate their user engagement strategies and the solutions they offer.

Leading the customisation charge

Startups and FinTechs are riding the crest of this wave of customisation. Traditional financial institutions frequently overestimate the costs associated with data collection and the development of meaningful personalised tools. FinTechs, on the other hand, harness their technological capabilities to sift through vast amounts of data, identifying individual preferences and behaviours. This insight enables them to better create personalised products and services that resonate with consumers on a deeper level. Offering such tailored experiences is not merely a competitive advantage; it is quickly becoming essential to attract and retain users.

The rise of the super app

The emergence of the super app epitomises this new paradigm. The inconvenience of managing multiple mobile banking apps is becoming a thing of the past as consumers increasingly favour a unified platform that addresses all their financial needs. This demand extends beyond financial services. The success of super apps like Alipay and WeChat Pay, which integrate services from ride-hailing to grocery shopping, illustrates how this model has become ingrained in everyday life. While the same level of adoption may not be universal due to various market factors, FinTechs are taking note and developing intuitive apps that combine financial and non-financial functions to deliver a seamless and efficient user experience.

FinTech’s personalisation extends to every facet of the financial journey. From customised budgeting tools and investment portfolios, to personalised insurance products and bespoke lending solutions, providers are redefining what it means to have a financial service that truly fits the individual.

The implications for personalisation in traditional banking

To stay relevant, banks must embrace digital transformation and consider partnerships with FinTechs or face the risk of further falling behind. Collaboration between established financial institutions and FinTech disruptors can yield the best of both worlds: the trust and scale of traditional banks combined with the innovation and agility of fintech.

As FinTechs continue to meet and exceed the hyper-personalised needs of consumers, they are establishing a new benchmark in the financial services industry. By making everyday financial transactions more manageable and integrated into our lifestyles, they are not merely responding to consumer demands but are also anticipating them. As this trend progresses, we can expect to witness further disruption, with fintechs at the helm, steering us towards a more personalised and accessible financial future for all.

About Papara

We are not a Bank; we are Papara, we are here for you.

We are a financial technology company that offers a new financial application experience. Keeping the user in mind against the traditional financial solutions, we strive to build the next generation financial super app. Our amazing community always suggest features and gives us constant feedback.

We integrate the most innovative technology to help our users control their money while being completely transparent.

In 2015,we started our services with the permission we received from the Banking Regulation and Supervision Agency to operate as an “Electronic Money Institution”.

Papara is the first non-bank to issue a Mastercard logo prepaid card in Turkey and currently a Mastercard, Visa, and Interbank Card Center member. In our seventh year of operation, we have acquired 21 million users and expanded our team to 1.000 happy people dedicated to creating the best financial experience.

Today, millions of our users choose Papara’s innovative products to make millions of transactions every month.

Image credit: www.dubaisims.com

  • Neobanking

Author

Dan Brightmore

Published

8 July 2024

Estimated Read time

4Mins

Digital payments have evolved significantly over the years, starting with the introduction of credit cards and ATMs in the 1960s and 1970s. Bank of America launched the first credit card, later known as Visa, in 1958.

Then ATMs revolutionised access to cash in the late 1960s. The 1980s and 1990s saw the rise of personal computers and the internet, setting the stage for online banking and electronic payment systems. PayPal, founded in 1998, pioneered major digital payment platforms, enabling electronic money transfers.

In the 2000s, smartphones led to the development of mobile payment systems. Apple Pay debuted in 2014, allowing contactless payments via smartphones, followed by Google Wallet and Samsung Pay.

The 2010s marked the emergence of cryptocurrencies, starting with Bitcoin in 2009, the first decentralised digital currency. Blockchain technology gained attention for its potential to transform payments with heightened security and transparency.

The COVID-19 pandemic in the 2020s accelerated digital payment adoption as people sought contactless and online options. Innovations like QR code payments, Buy Now, Pay Later services, and P2P payment apps gained popularity.

Today, digital payments are widely embraced, including mobile wallets, P2P apps, and online banking, as consumers and businesses prefer digital transactions over cash. Technologies like NFC, biometrics, and AI enhance payment security and convenience, while embedded finance integrates payment services into non-financial platforms.

Cryptocurrencies gained acceptance, and blockchain explores streamlined cross-border payments and security enhancements. Governments also developed frameworks to ensure digital transaction security and privacy, combat fraud, and protect consumer data.

Future Innovations in Digital Payments

Digital payments promote financial inclusion by providing digital banking access to unbanked populations. Looking ahead, the future holds promise with the rise of Central Bank Digital Currencies, fintech advancements, and ongoing payment technology evolution focused on user experience and security enhancements.

1. Contactless Digital Payments

In the future, contactless payments are expected to grow significantly as more people and businesses adopt this convenient technology. The ease and speed of tapping a card or phone to pay, especially highlighted during the COVID-19 pandemic, will likely continue to drive its popularity.

2. Integration with AI

Integrating Artificial Intelligence (AI) into digital payment systems will also enhance security and offer more personalised experiences for users. AI can detect fraudulent activities quickly and recommend payment options based on individual preferences and behaviors.

3. Growth of Cryptocurrencies

Cryptocurrencies are also predicted to become more common in everyday transactions. As digital currencies, driven by the likes of Bitcoin and Ethereum, gain acceptance, more people will use them for regular purchases, not just investments. This mainstream adoption could reshape how we think about money and transactions.

4. Digital-only Banks

We may also see the rise of digital-only banks, which operate entirely online without physical branches. These banks will offer streamlined services, often at lower costs, making banking more accessible.

5. Real-time Digital Payments

Real-time digital payments will become the norm, allowing instant money transfers, which will simplify transactions for businesses and consumers alike. For businesses, real-time payments mean quicker access to funds, improved cash flow management, and faster settlement of transactions. This efficiency is particularly beneficial in sectors requiring rapid financial transactions, such as retail, e-commerce, and services.

6. Biometric Authentication

Biometric authentication, such as fingerprint or facial recognition, will further enhance security. This technology will make payments faster and more secure by verifying a person’s identity through unique physical traits.

7. Internet of Things (IoT)

Lastly, the Internet of Things (IoT) is revolutionising various aspects of daily life, extending its impact to how financial transactions are conducted. As more everyday devices become connected to the internet, they gain the capability to facilitate payments seamlessly. Devices like smartwatches, home appliances, and even cars could potentially handle transactions directly. Customers could experience even greater convenience and efficiency in their purchasing processes.

Overall, the future of digital payments looks promising, with innovations that will make financial transactions more seamless, secure, and integrated into our daily lives.

  • Digital Payments

Author

Dan Brightmore

Published

Estimated Read time

4Mins

Digital transformation has introduced new challenges in financial cybersecurity.

The banking industry has shifted towards online transactions, leaving behind the days of brick-and-mortar branch visits for check cashing or deposits. As more and more sensitive data is transferred through internet banking technology, ensuring its security becomes paramount.

According to a 2023 survey by the Financial Services Information Sharing and Analysis Centre, 89% of financial institutions are increasing their cybersecurity budgets in 2024. This investment underscores the need for advanced internet banking security measures despite the existence of various security protocols.

In this article, we’ll explore the latest trends in internet banking security, examine real-world cases of cyberattacks, and provide valuable insights into securing your financial institution’s technological infrastructure.

Introduction to Internet Banking Security

As online banking becomes increasingly prevalent, financial institutions must prioritise cybersecurity – implementing specific measures to safeguard their systems and networks from cyberattacks.

Cybersecurity challenges in internet banking are multifaceted. Hackers employ a variety of techniques, including hacking attempts, data breaches, identity theft, malware, and viruses, to gain unauthorised access to sensitive customer data and financial assets.

A successful cyberattack can not only compromise sensitive information but also disrupt critical bank operations, causing significant inconvenience for customers and potentially leading to financial losses.

Common Cybersecurity threats

A 2021 report by IBM highlights the high cost of data breaches in the financial sector, placing it second only to healthcare. This vulnerability stems from the immense value of economic data, which can be exploited for fraud and other cyberattacks.

Beyond data breaches, financial institutions must also be vigilant against ransomware infections, phishing scams, and account takeover attempts. These threats carry the potential for data loss, operational disruption, and significant financial consequences.

In phishing attacks, cybercriminals impersonate bank representatives via emails, calls, or SMS messages. Their objective is to deceive customers into divulging sensitive information such as login credentials or credit card details.

Meanwhile, malware attacks take various forms, including worms, viruses, spyware, ransomware, and Trojans. These malicious programs can infiltrate devices, servers, or networks. If a customer’s infected device connects to the bank’s network, it poses a significant threat to overall financial cybersecurity.

Impact on consumers and banks

Cybersecurity breaches create huge consequences for both consumers and financial institutions. Consumers directly impacted by a breach may find their personal information exposed on the black market, thereby increasing their risk of identity theft.

The impact on banks, however, extends far beyond immediate financial losses from stolen funds. Beyond the initial financial blow, banks face the additional challenge of a potential erosion of customer trust. When customers fear their money is at risk, their confidence in the bank’s ability to protect them diminishes.

Mitigation Strategies

The first line of defense in ensuring robust financial cybersecurity lies within a well-trained workforce. Equipping employees with cybersecurity best practices empowers them to identify potential threats like phishing attempts or suspicious software. Regular training ensures awareness remains high and employees are prepared to act appropriately.

Organisations should also implement comprehensive cybersecurity policies and procedures. These policies should clearly outline acceptable online behaviour, data handling practices, and incident response protocols. Regularly reviewing and updating these policies ensures they remain relevant against evolving cyber threats.

Case Studies

One such case involved a social engineering attack on Experian’s South African office. A cybercriminal impersonated a representative from one of Experian’s clients and tricked an employee into releasing sensitive internal data.

Although Experian downplayed the information’s sensitivity, the South African Banking Risk Information Center reported that the breach affected a staggering 24 million customers and nearly 800,000 businesses. The compromised data eventually surfaced on a dark web forum in 2021. Fortunately, with law enforcement assistance, the data was promptly removed before widespread exploitation occurred.

The second case involves a data breach at Flagstar Bank, a major US financial institution. In 2022, the bank suffered a significant breach exposing the social security numbers of nearly 1.5 million customers. While Flagstar initiated incident response protocols and stated no evidence of data exploitation, they still advised customers to closely monitor their credit and promptly report any suspicious activity.

The cybersecurity landscape for banks is constantly shifting, demanding ongoing vigilance and adaptation. Advanced persistent threats (APTs) remain a major concern, as these actors employ sophisticated techniques to infiltrate networks and steal sensitive data.

Furthermore, the growing number of Internet of Things (IoT) devices introduces new vulnerabilities, potentially leading to large-scale breaches and botnet attacks. Emerging technologies like AI and quantum computing pose further challenges. 

While these technologies hold promise for enhancing security, they could also be exploited by malicious actors to launch more potent cyberattacks. Therefore, staying ahead of the evolving threat landscape will be a key focus for the future of cybersecurity in banking.

  • Cybersecurity in FinTech

Author

Dan Brightmore

Published

Estimated Read time

4Mins

Traditional evaluation processes for credit scoring and analysis for risk management are being elevated with AI.

This innovation is driving financial inclusion for people around the globe who don’t have traditional access to financial institutions. Equipped with the correct algorithm and capability to assess big data sets accurately, AI is the ideal assistant.

Using a machine learning model, AI in credit scoring will continue to develop and upgrade itself the more we use it. New advanced algorithms can be expected. AI will be able to process bigger sets of data and produce more accurate results. This means a bigger scope of potential borrowers can be accessed, while making the lenders’ work lighter.

As has been seen, this function of AI is used in real-time by several US-based finance companies, such as Ocrolus that provides financial documents review services. They’re using AI to achieve 99% accuracy in their results.

The next step to further AI’s advances is by putting more effort in training it, making it a sharper tool.

How AI is becoming essential to credit scoring

Credit scoring is one of the main ways to assess potential borrowers and help decide whether they’re eligible for mortgages, business loans, or even credit cards. It also helps determine the terms they are offered, and the amount they can borrow.

AI is essential in this area because much of credit scoring is dependent on providing financial evidence as a guarantee, usually in the form of employment payslips or assets. New potential borrowers are less likely to have assets and are in an economy where self-employed, contract, and gig work is increasingly the norm.

Then there are those who are ‘unbanked’, who don’t have any savings – that includes 1.5 billion people.

New technology means data sourcing can become broader and more inclusive. This creates new borrower categories to consider, making it possible for financial institutions to reach more borrowers who previously could not be assessed.

AI Boosts Accuracy and Efficiency

Credit scoring must be done thoroughly, and that is a process that takes time and effort when done manually.

Once the process is established, it can follow protocol and move much faster. AI’s power makes it much easier to go from identifying a new model for credit scoring to being able to roll it out reliably at scale

Machine learning means all data AI analyses feeds into the processing system. AI is trained by analysing a bulk of data consisting of transaction history, debt history, and payment history. All of which are the main points of traditional data scoring.

But, instead of only training to do this repeatedly and accurately, AI will detect previously unseen patterns. This will help predict future behaviours of potential borrowers, such as their probability of repaying on time, from groups that do not have good access to credit. 

AI in risk management and assessment

When it comes to risk management, the more accurate the analysis, the better. With AI evaluating larger sets of data with more data sources, the results can be more personalised.

The model also helps the system to monitor the activities in real time using advanced and adjusted tools. Therefore, the outcome itself will always be the most up to date and precise. In a more advanced scenario, the tools can even predict based on previous patterns, giving them a function to prevent.

Real-life, real-time examples

Aside from risk assessment and data analysis, AI also contributes to many other factors. It can be used for fraud detection based on patterns that it recognises. It can also create personalised offers based on an individual’s data analysis.

The usage of this type of AI and the tools it creates is already being applied. Enova, a US-based financial technology company, uses AI to complete its credit assessment. With more advanced updates every year, we can expect even more companies in different industries utilising AI.

The biggest challenge moving forward is how much effort we want to put in to evolve the AI we have now, as the complexity grows and bigger effort is needed. Evidently, AI banking solutions help bring huge impacts, so attention is now shifted to updating them furtther.

The assistance AI brings to overall credit scoring and risk management in general will easily outweigh the complexity of its introduction. The more patterns and data AI consumes, the more accurate the results and powerful its feedback loop. Credit scoring is possibly the most impactful application of AI in financial services for the future of consumers.

  • Artificial Intelligence in FinTech