EXCLUSIVE: ‘Me, me, me…a new chapter in fraud prevention’ – Brett Beranek, Nuance in ‘The Fintech Magazine’

The events of 2020 left many organisations and their customers more vulnerable than ever to digital fraud. Brett Beranek, VP and General Manager for Security and Biometrics at Nuance Communications, foresees greater reliance on biometrics as a solution

Whether within our workplaces, our homes, or even our cars, artificial intelligence (AI) technology has quickly become part of almost every aspect of our lives.

Activities and interactions we wouldn’t think twice about – such as messaging a live chat agent on our favourite retail website or using our voice to verify personal details with our bank – typically incorporate the use of conversational AI. In many cases, there is a good chance that the AI technologies we are interacting with have been developed by Nuance Communications.

For more than 20 years, the company has pioneered voice technologies, natural language understanding and machine learning that are designed to transform the way people work, connect and interact with each other. It holds more than 3,000 patents, and its AI-powered, intelligent engagement solutions are currently trusted by 2,500 leading brands worldwide. In fact, Nuance supports 31 billion intelligent customer interactions, and prevents £1.5billion in fraud losses every year.

Financial services institutions, including 95 per cent of the top banks worldwide – for example, NatWest and HSBC – are deploying Nuance technology to provide frictionless, virtual self-service and live assistance through digital and voice channels, secured with biometric solutions that increase customer retention, expand share of wallet, and reduce operational costs.

A new fraud landscape

While the current COVID-19 crisis has brought many businesses and operations to a standstill, one area it hasn’t diminished is fraud. The sad truth is that fraudsters don’t stop their crimes because of a pandemic. In fact, they often seize the immense change that comes with an event like this to ramp up their activity – targeting individuals and businesses while they are at their most vulnerable and least protected.

With the current, widespread shift towards staying – and therefore working – at home, many businesses and their customers are finding themselves coming up against more frequent and more sophisticated styles of attack. Many organisations are simply not prepared, and do not have the latest safeguarding tools in place to shield themselves from financial loss and protect their customers from identity theft. In such an uncertain time, it has never been more important for organisations to bolster their cybersecurity strategies and arm themselves with the technology to keep fraudsters at bay while maintaining usual levels of service.

During these unprecedented times, companies have continued to turn to Nuance’s AI-powered biometric solutions as a means of protecting their employees and customers alike from fraudsters. By automatically identifying when fraudulent calls are being made, these technologies are proving an invaluable tool for helping to protect customers looking to make digital transactions during this unusual time. They also help to shield work-at-home agents, who are often the weakest link in the cybersecurity chain, by improving internal security checks and verifying their identities. This prevents fraudsters from pretending to be them in order to gain wider access to businesses’ sensitive information.

With the uncertainty around the pandemic still raging and fraud attempts continuing to increase, many businesses will be wondering what lies in wait this year, and how they can effectively protect both their employees and their customers.

With that in mind, we spoke to Brett Beranek, vice president and general manager for security and biometrics at Nuance Communications, to find out what he thinks this year’s fraud prevention trends will be. Here are his top five.

Forward-looking chief information and security officers will transition to password-less authentication, with the twin goals of customer convenience and enterprise security

Consumers want a digital experience that is easy, secure and free of passwords. As more people shift to online channels in order to bank, socialise, play, and shop, users are demanding a more sophisticated and secure experience.

Passwords have lulled consumers into a false sense of security for years, especially as the number and variety of devices on which apps are used skyrocketed, each requiring critical information to be entered repeatedly – and, thus, each instance an opportunity to track and steal that data.

It’s more important than ever for companies to demonstrate to customers that they take their security seriously. Consumers are now more conscious than ever of the risks surrounding their identity. They will start to demand more from the businesses they deal with. Organisations can’t afford to do things only based on return on investment – better security is now a question of customer retention, loyalty and corporate social responsibility.

An integrated approach to fraud prevention and authentication will be the key to protection against flimsy device-side biometrics

Customers are going to demand security protocols that identify them, in particular, not just someone who may have their identification. We are seeing a noticeable shift away from technology that does not authenticate the identity of the actual person interacting with security measures.

It is no longer enough to authenticate using passwords, PINs, or SMS confirmations, for example. That information is too easy to obtain. Biometrics such as voice recognition, behavioural recognition, fingerprints and eye scans are critical to a secure online presence.Thanks to years of interacting with smart devices, customers often already feel comfortable with fingerprint ID and facial recognition. Unfortunately, most of these device-side biometric authentication methods don’t have any real impact on stopping fraudsters because, firstly, it is challenging to determine who has created the biometric print and, secondly, the prints are limited to a specific device, making them difficult to leverage across multiple channels and impossible to port from one device to the next. Their ‘value’ begins and ends with being free.

It is server-side biometrics, such as voice patterns, that will result in both significant fraud prevention and frictionless, convenient customer experiences.

Cutting-edge AI will enable biometrics to solve increasingly complex security challenges

Earlier this year, Telefónica, a Spanish multinational telecommunications company and one of the largest mobile network providers in the world, engaged Nuance to help it deploy voice biometrics to analyse the sound of clients’ voices, to determine whether they are 65 or over. This critical determination helps the bank provide world-class anti-fraud protection to an age group that is highly susceptible to fraud.

Harnessing state-of-the-art technology will allow organisations to not only  prioritise or adapt services for specific customer demographics, but also strengthen fraud prevention efforts by providing additional biometric factors to consider.

Security will need long arms to protect against increased fraud brought on by remote working

As companies extend working from home indefinitely in what Harvard Business Review’s most recent cover tags as The Work From Anywhere Future (Nov-Dec 2020), fraud against remote workers and frontline agents will increase.

Companies will need to work quickly to combat voice fakes (ultra-realistic speech cloning) and deepfake voices (the use of AI to create speech, accents, and tones) to seamlessly secure interactions with workers worldwide. Traditional security measures will also need to operate at peak performance with so many individuals outside organisations’ firewalls.

Remote work also represents a potential for increased occupational fraud. Unsupervised employees with access to personal identifiable information have a new opportunity to steal valuable data. Under the increased pressure brought by challenging social and economic times, conditions are right for a surge in occupational fraud. Forrester Research echoes this sentiment, forecasting that 33 per cent of data breaches will be caused by insider incidents, up from 25 per cent today.

Customer care will make a drastic shift to video/virtual settings

As virtual consultations, transactions and interactions become the norm between brands and consumers, digital channels will need to be as secure and convenient as if these interactions were happening in person.

Video customer care is a trend that’s emerging as a result of COVID-19, and voice biometrics are a critical aspect of authentication and keeping customers safe. The Industrial Bank of Korea (IBK) has already implemented Nuance’s voice biometric technology to ensure robust, sophisticated customer authentication, as virtual transactions rise significantly. Reporting 100 per cent consistency in validation rates, IBK has, in this way, been able to revolutionise the digital banking experience.

Beranek is confident that 2021 will see greater digital security and peace of mind.

“But the traditional ways of doing things, even ones so fundamental as the online password, no longer suffice,” he says.

“Biometric security, based on verifiable traits such as a person’s retinal scan, fingerprints, and voice, will replace subjective codes that are too easily stolen and misused,” he concludes.

“Adopters will make a quantum leap in their security protocols and find a smooth transition to a more secure digital presence.”

This article was published in The Fintech Magazine #19, Page 20-21