Identity fraud is absolutely out of control in the UK and there is, so far as I can see, no prospect of any form of infrastructure coming into place to deal with the problem. Whether we look at scammers going through Facebook to perpetrate dating fraud or going through LinkedIn to perpetrate corporate fraud or going through the Land Registry to perpetrate property fraud or going through Companies House to perpetrate corporate fraud, we can draw only one conclusion: identity is broken. Until we fix identity, we can’t attack fraud. And since it’s going to take a while to fix identity, even if we start now, that means that fraud is going to carry on getting worse. Don’t believe me? Then listen to a bank:
[Barclays] is predicting that online festive fraud will be at its highest ever levels in December 2017 and could cost shoppers more than £1.3bn.
Merry Christmas one and all. The truth is that we are under attack. It isn’t script kiddies and casual card counterfeiters any more, it’s organised crime. The Callcredit Annual Fraud & Risk Report surveyed over a hundred fraud professionals and found that more than three-quarters of them rated organised cybercrime as the biggest fraud threat to their organisations in the coming year. Given that current projections are that the damage from cybercrime with double from $3 trillion last year to $6 trillion in 2021, their fears are well-founded.
Yet when those same fraud professionals were asked what their priorities were for the coming year, nearly nine in ten put regulatory compliance at the top of their list.
Is there any cause for optimism? Well, I think the answer to that is yes. Remember Callcredit’s white paper on “Credit, Fraud and Risk in the Age of Machines” in which their data scientists explored the use of machine learning. I think they are right to be optimistic about these new technologies. The answer seems to be that they are, and that there may be light at the end of the tunnel. If we look at what kinds of AI are being deployed in the banking sector and what they are being used for, we see this optimism reinforced. It’s time for a change: if we are going to defend ourselves against the next generation of criminals, we need the next generation of technology to do it.