What does 2021 hold for digital financial services?

How will digital financial services and identity management evolve in 2021? iProov's Aarti Samani, SVP, product and marketing, shares her predictions for the year ahead

1 December 2020

1. More financial regulators will authorise onboarding via automated biometrics
Within the next 12 months, banking regulators in global territories – including Europe and the Far East – will authorise the use of automated biometrics instead of video calling for remote Know Your Customer (KYC) processes.

Just as in 2019, when a well-publicised voice fraud scam duped a high-profile CEO, by the end of the year there will have been several criminal money-laundering scandals arising from the use of deepfakes in video calls.

Countering this could very well mean that several countries, including the US, also take concrete steps towards instituting government-backed digital identities. This will be an important step towards enabling financial institutions and government departments to verify identity and mitigate fraud in bank onboarding and government support programs.

2. Digital novices will require simpler authentication methods Recent months have seen all parts of the family, from all age groups, being forced to familiarise themselves with apps, web and video-calling technology out of necessity. This should be treated as a real opportunity to provide them with access to services that they wouldn’t otherwise have had. In 2021, this will result in three things: firstly, the password, which has long been the bane of many people’s online interactions, will be replaced by simpler authentication methods. Passwords are too complicated - they prevent people from using online services and don’t offer the inclusivity that simplified authentication via biometrics provides.

Secondly, if progress in this area continues to be made in 2021, it’s possible that as many as 100 million people over the age of 70 will possess digital IDs worldwide, with the concept of the ‘digital power of attorney’ very soon becoming a reality.  Thirdly, many of the people using technology for the first time - elderly people or those less experienced with tech - are also often the ones who are most susceptible to online manipulation. Creating ways of safeguarding individuals online will move further up the agenda.

3. The deepfakes arms race will intensify in 2021
In 2021, we can expect to see an explosion in the quality and quantity of deepfake usage. Some of it will be for light-hearted pranking - Joe Biden turning up to family Zoom calls, for example. Some will be for entertainment - Spitting Image uses masks but the makers of South Park have gone straight to deepfakes for their weekly online satire show.

But we’ll also see deepfakes being used for disinformation and trolling. Celebrities, politicians and experts will be shown saying things that they’ve never said. Armies of ‘fake people’ who look and sound real will share disinformation on an enormous scale, making people believe that thousands of people hold a contentious opinion, when in fact none of those people even exist.

What has changed is that it has become increasingly simple to create a very high quality, sophisticated deepfake. What was once a very complicated process, only really possible in Hollywood movie studios, is now something that any teenager sitting in their bedroom can execute proficiently. Those deepfakes become a currency on social media, whether they’re used to assert credibility or used to attack.

As iProov saw in a survey of banking CSOs on the subject of deepfakes, the financial services industry could be affected by deepfakes in a number of ways. Onboarding processes could be subverted and fraudulent accounts created to facilitate money-laundering. Payments or transfers could be authorised fraudulently. Accounts belonging to high net worth or high-profile individuals could be hijacked. Synthetic identities could be created, whereby criminals take elements of a real
identity and attach them to a non-existent individual. CEOs can be impersonated, leading to employees being tricked into unauthorised payment transfers or divulging sensitive information. Finally, insider trading and market manipulation could
be facilitated.

Find out more about iProov’s Genuine Presence Assurance technology and how it is helping the financial services industry to verify online customer identity, increase security, and simplify user experience. 

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