"The thing to challenge is the fact that fraud prevention is a vertical by itself," says Ronchetti, CTO at XTN Cognitive Security. He stresses that recent fraudulent trends exhibit "no real separation between fraud, cybersecurity, and AML.”

In this episode of The Security Strategist podcast, Jonathan Care discusses fraud prevention with Ronchetti and Paolo Carmassi, Head of Sales at XTN. They explore the connection between fraud, cybersecurity, and artificial intelligence (AI), emphasising the need for a holistic approach to tackle modern fraud challenges.

The conversation further spotlights how to take advantage of local identity and data privacy as competitive advantages, particularly in Europe. The speakers discuss emerging threats such as shell game malware.

The relation between fraud, cybersecurity, and AI is apparent in scenarios like authorised push payment fraud. It often involves an initial data breach, followed by social engineering, and culminating in financial fraud.

Future of Fraud Prevention

To effectively fight such threats, a detailed picture of the entire "kill chain" is critical. It should include expertise from cybersecurity and anti-money laundering (AML).

Expanding on “kill chain,” Carmassi says that "fraud is no longer a case of just the banking industry or the financial services at large. It's something that is starting to spill out into other industries as well."

The head of sales points to examples in gambling, with issues like account takeover and bonus abuse, and even the automotive sector, where app vulnerabilities could lead to physical security threats.

The emergence of sophisticated bots further complicates this space. That makes it a unified defence strategy pressing across all sectors.

Alluding to an example, Ronchetti explained, "Last year we were dealing with one of the top 10 European banks. The reason for that was GDPR." The bank had to replace a well-established American vendor after over a year of a Proof of Concept (POC). This was because the vendor's data-sharing practices, particularly with clients outside the European Union, clashed with GDPR requirements.

This incident stresses the importance of a provider's ability to tackle the complex European regulations. The upcoming AI Act further accentuates this divide, with European and US approaches to AI regulation diverging significantly.

The episode concludes with insights on the future of fraud prevention, focusing on trust and the integration of behavioural biometrics.

Takeaways

  • Fraud prevention must integrate with cybersecurity and AI.
  • The traditional view of fraud as a silo is outdated.
  • Emerging technologies blur the lines between industries.
  • GDPR sets a global standard for data privacy.
  • Cultural and geographical factors influence fraud solutions.
  • New threats like shell game malware are evolving.
  • Younger demographics are becoming targets for fraud.
  • Trust is essential for competitive advantage in fraud prevention.
  • Behavioural biometrics can enhance identity validation.
  • A holistic view of fraud prevention is necessary.

Chapters

00:00 Introduction to Cognitive Security

04:01 Rethinking Fraud Prevention

08:12 Leveraging Local Identity and Data Privacy

11:53 European-Centric Fraud Solutions

16:07 Behavioural Biometrics in Fraud Prevention

20:11 Emerging Threats in Fraud

23:59 Future Paradigms in Fraud Prevention

About XTN Cognitive Security

XTN is a European vendor of online fraud prevention solutions, empowering organisations to trust their digital users. Our AI-powered platform delivers top-level protection against fraud and cyber threats across multiple sectors and channels. Since 2024, XTN has been part of the CY4GATE Group, strengthening its international leadership in the cybersecurity sector.