Entrust, Proof, TransUnion offer platforms, insights to combat financial fraud

Fraud is older than money, so it’s no surprise that it remains a scourge on the modern economy. The first recorded attempt at financial fraud solved itself, when a Greek merchant named Hegestratos supposedly drowned trying to pull off a scheme to sink his boat and reap the insurance rewards.

Today’s fraudsters are much better equipped with the knowledge and tools to do real financial damage – notably, large language models (LLMs), computerized pattern recognition models and other algorithmic tech that we broadly refer to as AI. As fraud has evolved, the fraud detection industry has grown in tandem, and it shows an upward trend: according to Forbes, the fraud detection subsector of the digital identity market is expected to increase in value from $28 billion in 2024 to $63.2 billion in 2029.

“The proliferation of data use cases (i.e., input into LLMs, digital financial transactions, appendage to enhance profile) requires continuous evolution of data management technologies to keep up with increasing user and regulatory requirements,” writes Jackie Shoback, managing director of 1414 Ventures, an early-stage venture capital fund focused on digital identity. “This, in combination with the increasing value and exchange velocity of data, further emphasizes these effects. Therefore, AI’s capabilities are becoming extremely valuable in managing and understanding these large amounts of data, which drives growth in sectors such as alternative credit and financial identity and biometrics.”

Along with fraud and fraud detection, data privacy, digital identity and overall cybersecurity are all subject to the seismic impacts of AI technology – meaning, the next few years are liable to be a boom time for firms turning defensive AI against its more belligerent relatives, Auntie GenAI and Uncle Deepfake.

Entrust’s new banking ID platform offers instant physical, digital card issuance

Entrust, the Minnesota-based digital ID verification firm, has launched a new all-in-one consumer banking platform. A release says Entrust’s product “allows banks and credit unions to provide high-assurance security throughout the customer lifecycle,” with a particular focus on account openings.

“Criminals will continue to take advantage of banks that underinvest in secure digital services,” says Tony Ball, president of payments and identity at Entrust. “Deepfakes, data breaches, fraudulent account openings, synthetic identities and phishing attacks are all very real threats impacting consumers; by utilizing an all-in-one solution, financial institutions are able to ensure customers are protected at every turn.”

The platform leverages AI for identity verification with a suite of fraud safeguards including document validation and biometric liveness detection. It has the capability to instantly issue physical and digital cards for quicker conversion. And its “connected identity experience” ties customers to a strong, real identity and biometric identifier at onboarding, which can be reused or referenced at high-risk moments.

This week, Entrust was named among companies in consulting firm Gartner’s first-ever Magic Quadrant for Identity Verification.

Proof launches live face-to-face IDV for high-level assurance

In a press release, Boston’s Proof makes a bold claim: “constructing a fake identity, generating a fake video, or falsifying records is now a trivial task, making it impossible to take people at face value online.”

Verify is Proof’s new deepfake defense, “a live face-to-face experience that delivers high-level assurance with identity verification performed in the presence of an agent, reducing the risk of fraudulent activities such as deepfakes by ensuring that users are legitimate.”

Falsified records, forged signatures, deepfake audio and video, rampant identity theft: the purely virtual experience, Proof says, is no longer trustworthy for high-stakes transactions.

“Trust and security in digital transactions is a challenge that society must solve – but we’re losing the battle,” says Proof CEO Pat Kinsel. “Fraud is now ubiquitous, and existing technology offerings on the market do not successfully combat it. Companies can barely manage yesterday’s threats, but must suddenly combat a new world of deepfakes, in which their customers and employees can be perfectly impersonated and records perfectly falsified.”

The answer is to combine real-time biometric identity verification, face-to-face engagement and deepfake detection in a platform that allows instant connection to a human agent through a secure video link.

“After the user inputs their personal information (name, address, email, phone number and birthdate), the agent then joins and supervises the identity verification process by prompting the user to perform biometric identity verification, which includes taking a selfie and uploading their official identification documents,” says the release. The agent completes the process once verification is confirmed.

Throughout the process, Proof performs automatic deepfake analysis to evaluate fraud risk, supported by Reality Defender’s deepfake detection model.

ServiceLink integrates Proof IDV across live, digital mortgage closings

Proof has also secured what a press release calls a “major integration” with digital mortgage services provider ServiceLink, which will deploy Proof’s Identify product for fraud prevention.

“Fraud in real estate transactions has been rising,” says Kinsel, “and the industry needs solutions that protect not only digital closings but every type of transaction.”

Dave Steinmetz, division president of origination services at ServiceLink, says the integration “provides additional fraud detection points to enhance our existing processes and procedures, allowing ServiceLink to further modernize the closing process for in-person, manual wet signings and eSignings.” ID verification is active from the onset of the transaction.

With Proof deployed, ServiceLink is able to offer multiple identity verification methods, from biometric comparison to email and SMS verification to API integration and printed QR codes for paper-based transactions, meaning it can implement secure IDV across both digital and traditional closings.

TransUnion says government fraud prevention must factor in digital inclusion

Fraud proofing government agencies brings its own set of challenges, which are explored in a new report from TransUnion and Scoop News Group. Among them is the issue of digital inclusion.

“Government agencies are responsible for delivering a wide range of services to diverse populations, including vulnerable and emerging groups who may lack traditional forms of identification, such as a non-expired driver’s license or other government-issued ID,” the report says. “The process of verifying identities is complicated further by the need to prevent fraud while ensuring equitable access to services.”

Synthetic identity fraud in a government context, in particular, is exploding, showing a volume change of 184.3 percent from 2019-2023. And the costs are not limited to reputation or political capital: according to the U.S. Government Accountability Office, the federal government is estimated to lose between $233 and $521 billion annually to fraud.

It underlines TransUnion’s key message: “as federal and state government agencies continue to digitize their services and expand their online presences, robust identity proofing and fraud prevention strategies become increasingly critical.”

Hegestratos possibly an ancient deepfake

Fraud is not going away, and the increasingly slippery world of the AI-era internet makes it harder and harder to tell what’s real from what’s not. The proven ability to determine what’s real will be a key skill in the coming years. For proof, look no further than the story of Hegestratos, which appears to mainly have been repeated by modern-day financial services companies as a variant on several similar instances recorded in the Select Private Orations of Greek statesman Demosthenes (384 -322 BCE).

In other words, it’s probably a fraud.

Article Topics

biometric liveness detection  |  biometrics  |  digital identity  |  document verification  |  Entrust  |  financial services  |  fraud prevention  |  identity verification  |  Proof  |  TransUnion