More Investment In AI & ML Crucial To Outsmart Fraudsters

The surge in data breaches has made us realize the vulnerability of data privacy in the face of modern technology

Ankit Ratan

FinTech BizNews Service   

Mumbai, December 20, 2023: As we are in the last month of the year, Ankit Ratan, Co-founder & CEO at Signzy, has an insightful year-end comment to share: “The year winding down has witnessed significant regulatory interventions with an increased collaboration and interaction between regulators, banks and financial institutions, fintech firms and other technology solution providers. This in turn has helped the wider financial services industry identify opportunities, embrace new ways of working and navigate the evolving regulatory approach. The surge in data breaches has made us realize the vulnerability of data privacy in the face of modern technology. In response, there has been a global proliferation of new laws aimed at regulating the handling of users' data by companies and organizations. In this effort, the European Union's implemented General Data Protection Regulation (GDPR), designed to safeguard data privacy of the users. This has triggered a notable "GDPR domino effect," with countries worldwide adopting privacy frameworks inspired by the principles laid out in GDPR, thereby reinforcing the collective commitment to fortifying data protection measures. In alignment with global standards, India also took the milestone step to enact the Digital Personal Data Protection Act, which not only offered clear guidelines to businesses on usage and storage of customers’ personal data but also promoted responsible innovation. This will positively impact end consumers’ trust in the digital ecosystem and give much needed control and protection to them over data privacy. Next, the Reserve Bank of India (RBI) strengthened cybersecurity measures through Master Direction amendments, urging regulated entities to adopt a risk-based approach for KYC updates. This has helped in enhancing digital trust and combatting advanced tactics of fraudsters. On the back of this rapidly evolving landscape, we also saw an increasingly diverse range of uses for fintech and regtech applications, ranging from credit risk analysis, data governance to cyber risk resilience and information security. The amendments introduced by the regulators have made compliance easier which will also lead to enhancement of financial inclusion.

Looking ahead to 2024, we believe that the financial institutions will expand within the digital ecosystem. E-KYC, onboarding, fraud detection, and compliance services will aid in regulatory compliance while protecting user data and building digital trust. Onboarding, especially in a country with 1.4 billion Aadhaar holders, requires a deeper understanding of individuals beyond mere data possession as businesses don’t know ‘if the person is who he says he is?’. It is important for the banking industry to use Transaction monitoring which will help in distinguishing between good and bad actors.

A notable trend for 2024 is the evolution of Generative AI, transforming how alerts are validated, especially given the daily generation of around 10,000 alerts. This innovation reduces analysis time and enhances scalability without proportionally increasing human resources. Along with Gen AI, artificial intelligence (AI) and machine learning (ML) continue to play pivotal role in enhancing customer experience. Through the utilization of machine learning techniques, AI systems can proficiently analyze vast quantities of data, recognise complex patterns, and subsequently generate informed predictions or decisions. ML serves as a cornerstone in elevating the capabilities of AI, rendering it more intelligent, adaptive, and efficient. To combat sophisticated fraudsters, increased investment in AI & ML is crucial to outsmart them and protect user data, fostering a trust-oriented digital environment. As we enter the new year, businesses will be compelled to adopt digital-first technologies. KYC/KYB processes will be pivotal in preventing money laundering and terrorism financing. With escalating data leaks and identity theft incidents, organizations need to prioritize trust and security, creating a robust risk infrastructure to safeguard user data. Simplifying the user journey through secure, transparent, and frictionless experiences across sectors will pave the way for innovation and scalability.”


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