Electronic Know Your Customer (eKYC) processes have become a critical part of the fight against deepfakes. Deepfakes have become one of the largest security threats worldwide, bypassing inefficient facial recognition software and leading to large-scale data breaches. Customer identity verification processes must leverage advanced AI technologies to fight against this threat, implementing eKYC solutions with biometric authentication within every verification process.
Insight Partners, a leading Private Equity firm, stated in their 2024 tech predictions piece that “the risks created by AI will only be combated with AI.” This is certainly true regarding digital fraud and the need for defensive eKYC solutions. Deepfakes are a form of media created by Artificial Intelligence, and they’re being used for deception worldwide. They’ve become a leading tool for digital impersonation, as they’re generated by expert machine-learning algorithms and facial mapping software, which can implement data into digital content without permission.
The execution of these deepfakes is usually excellent, making them highly realistic and believable despite being completely fabricated. They tend to consist of either videos, images, or voice recordings.
The Threat Posed By Deepfakes
35% of US businesses have experienced a deepfake security incident in the last 12 months, with this form of crime ranking as the country’s second most common cybersecurity incident. Despite the apparent danger, businesses are slow to act against the threat of deepfakes.
KPMG’s recent report, “Deepfakes: Real Threat”, highlights that 71% of businesses have not taken steps to safeguard their organization from this form of fraud. 46% of businesses have not even thought of steps or a plan of action to protect themselves from deepfakes.
A study from Juniper Research at the end of 2022 predicted the following forecast for 2027 after assessing the growing threat:
“Global business spend on AI-enabled financial fraud detection and prevention strategy platforms will exceed $10 billion globally in 2027; rising from just over $6.5 billion in 2022.”
The rising threat of AI-powered fraud requires an AI-powered defense, starting with robust eKYC processes. These technologies are able to detect bad actors and presentation attacks quickly, with liveness detection analysing subtle facial expressions, skin texture and more, identifying even the most sophisticated deepfakes.
AI-Powered eKYC
Traditional KYC processes have been used historically by businesses to achieve AML and KYC compliance, yet this often left the organizations vulnerable to hefty penalties due to these manual processes being prone to error. Advertising Week reports in their piece “How AI is Used in KYC Processes” that:
Between 2008 and 2018, banks and financial institutions faced approximately $26 billion in fines globally for non-compliance with AML, KYC, and sanctions fines, highlighting the critical need for robust KYC practices.
Artificial intelligence can now power electronic Know Your Customer (eKYC) solutions that can ensure accuracy and efficiency with advanced technologies. Biometric identity verification with liveness should be carried out when onboarding a new customer, as these expert technologies are able to look for signs of life and therefore differentiate a deepfake from a video of a living being.
Features of eKYC Enhanced by AI
AI powers many leading features of eKYC solutions, with some examples including:
- Biometric Verification with Liveness Detection: utilizes advanced AI to verify users’ genuine presence. This refers to our custom-built liveness detection feature powered by our Presentation Attack Detection (PAD) technology. This function builds 3D facial maps and analyzes the minutia of skin texture, pixelation, and micro-expressions, ensuring that a user was present when the photo was taken.
- Document Verification with Optical Character Recognition (OCR): AI-powered OCR quickly and accurately extracts relevant information.
- Real-time Monitoring and Alerts: AI-driven systems excel at real-time data analysis. This enables organizations to monitor customer transactions in real-time, and any suspicious behavior is caught quickly.
- Enhanced Risk Assessment: AI can analyze large datasets to identify potential risks and can continuously learn from data to improve accuracy.
- Adverse Media Screening: AI allows for comprehensive screening for negative news associated with individuals or companies, identifying clients with reputational risks.
Benefits of AI-Powered eKYC
eKYC solutions that leverage AI are needed to end the threat posed by deepfakes. There have been many cases of deepfakes bypassing face authentication processes, proving the need for eKYC to evolve and implement advanced AI technologies.
In 2019, a deep-fake video was used to scam a CEO into wiring $243,000 to a bank account. Similarly, in 2021, a criminal gang used deepfakes to bypass eKYC authentication and access bank accounts containing millions of dollars.
In 2019, a deep-fake video scammed a CEO into wiring $243,000 to a bank account. Similarly, in 2021, a criminal gang used deep fakes to bypass eKYC authentication and access bank accounts containing millions of dollars. As a result, many companies became aware of the need to invest in advanced AI technologies to detect and prevent deepfakes from being used within authentication processes.
- Bespoke Solutions: Automatic workflows that can be highly tailored to fit different compliance requirements. Utilizing machine learning technologies, eKYC solutions can streamline data extraction while providing a smooth user onboarding experience.
- Streamlined Onboarding: Implementing a robust eKYC process allows you to verify customers quickly and efficiently, enabling organizations to scale safely.
- Enhanced Security: eKYC is far more effective at protecting organizations from identity fraud and financial crime. The use of advanced biometric verification, as well as AI-driven fraud detection, allows organizations to minimize fraud risk.
- Improved Customer Experience: The streamlined onboarding process also results in a more positive user experience, reducing friction and increasing customer satisfaction.
- Global Reach: eKYC solutions enable businesses to operate globally, quickly verifying many customers and supporting multiple languages and various international regulations.
eKYC with ComplyCube
ComplyCube is a RegTech100 all-in-one platform for automating Identity Verification (IDV), Anti-Money Laundering (AML), and Know-Your-Customer (KYC) compliance. It has global customers in legal, telecoms, financial services, healthcare, e-commerce, cryptocurrency, travel, and more.
Our full suite of AI-powered KYC/AML solutions enhanced with automatic workflows are highly tailored to fit our customers’ compliance requirements. Utilizing machine learning technologies developed and owned by our team, our solutions streamline data extraction while providing a smooth onboarding experience for the user.
For more information on our eKYC solutions, contact our expert compliance team.
