Insights from Identity Day by Caf on how businesses and individuals can adapt to digital growth, AI, and real-time payments while tackling challenges like fraud and regulations.
A thirsty crow found a pitcher with only a little water at the bottom, out of reach. After trying and failing to drink, he decided to drop stones into the pitcher. Slowly, the water rose, and he was able to drink and save his life.
Moral: Necessity sparks invention, but it's creativity and persistence that solve problems.
In today’s fast-paced digital world, the average person manages over 100 online accounts, with digital commerce and real-time payments rapidly expanding. As businesses and individuals gain access to powerful tools like AI (think ChatGPT), the growth opportunities are immense—but so are the risks. To thrive in this environment, it’s essential to be prepared. Organisations and individuals deal with challenges such as transactions happening in real-time, fraud, evolving regulations, geopolitics, multitasking, unpredictable circumstances, and so on. Flexibility, adaptability, creativity, and continuous learning about the latest technologies, threats, and market trends are key to staying ahead.
Critical issues shaping payments (digital transactions) include:
Emerging threats: APP fraud, romance and investment scams, impersonations, deep fakes, synthetic identity, data breaches, social engineering, and more.
New regulations and initiatives: APP disbursement requirements in the UK, the EUDI wallet in the EU, the AI Act, and data privacy regulations.
C-suite priorities: Leveraging AI, viewing identity beyond compliance, and positioning it as a business growth driver.
Businesses are deploying cutting-edge technologies, prioritising education, and fostering collaboration to tackle these challenges. Moreover, industry events have become important platforms for experts to network and share insights and strategies.
On September 18th in London, an amazing lineup of speakers from top companies like Visa, Kount, iProov, Wise, and more came together to share their insights on key topics in identity, security, and technology at Identity Day by Caf. While this wasn't the first Identity Day—Brazil has hosted previous editions—it was the event's exciting debut in Europe. The day was filled with valuable sessions and great networking opportunities, and The Paypers was thrilled to be part of it.
Caf’s CEO Jason Howard kicked off the day with a thought-provoking (and somewhat unsettling) remark: ‘May you live in interesting times’ inviting the audience to both seize the benefits and risks of the digital economy we have created. Within this economy, digital identity (whether we refer to users and businesses) has become like currency. Verifying that identity within a transaction is the digital equivalent of a handshake, setting the foundation of trust between parties. However, that ‘handshake’ is becoming harder to establish due to challenges like deepfakes, romance and investment scams, and social engineering.
Fraud is real, pervasive, and touches every corner of our lives. It’s not just about money—it’s about human stories. Fraudsters exploit the latest technological advancements, along with human emotions like greed, fear, loneliness, and hate, to carry out their attacks and maximise their gains. A highlight from the event was Cecilie Fjellhøy’s presence—known for her bravery in standing up to The Tinder Swindler—showing how real and personal fraud can be.
In a fast-paced digital economy, where real-time payments and transactions happen instantly, it's important to pause and reflect before acting. This advice applies to both individuals and organisations. Approving online transactions—whether it’s a payment, loan, or verification—has become incredibly easy. Industry experts now advocate for ‘healthy friction’ or ‘positive friction’. As Cecile pointed out, we need a balance that makes taking out a loan or making a payment efficient and secure.
Still, adding healthy friction might lead to fewer accepted transactions and potentially less business. This raises key questions: How can we view fraud prevention, compliance, and identity verification as opportunities rather than burdens? How can we elevate identity discussions to the C-Suite, especially when 5-10% of CEOs acknowledge an identity problem, and 100% admit they have a profitability problem, as Scott Przybyla from Kount noted?
The answer lies in showing the financial benefits. Presenting data comparing the cost of fraud versus the cost of prevention and highlighting the potential for profit. Make your presentations memorable, and as Andre Edelbrock from Maple Investco and Hartley Thompson from Microblink suggested, always bring your authentic self to the table when advocating for using identity access management to prevent fraud.
The C-suite not only focuses on digital identities but also explores the potential of AI in their strategies. Before diving deeper, it's important to clarify that ‘AI’ is a broad term that tends to be reduced to the concept of ChatGPT that everyone is using nowadays. Mitch Trehan from Allica Bank highlighted some AI technologies that can be implemented successfully in financial services (some of which have been in use for quite some time):
Machine Learning (ML): A branch of AI that uses statistical models to make predictions. In finance, ML is used to detect fraud, automate trading, and offer financial advisory services. Industries like finance and ecommerce rely on ML to combat fraud.
Deep Learning (DL): An advanced form of ML based on artificial neural networks. DL is applied to tasks like classification, prediction, computer vision, image processing, and audio-visual recognition. In finance, it’s used in algorithmic trading, customer data management, customer segmentation, recommendation systems, and sentiment analysis.
Generative AI (GenAI): This type of AI creates images, text, videos, and other media from input prompts. In finance, GenAI generates synthetic data to improve compliance controls and reporting accuracy. It also produces deepfakes and other content. GenAI covers a wide range of AI systems focused on content creation, including text, images, music, and code.
Large Language Models (LLMs): LLMs are advanced AI models designed for tasks like language generation and natural language processing. They learn from vast amounts of text, with examples including OpenAI’s GPT models (used in ChatGPT), Google’s Gemini, Meta’s LLaMA, and IBM’s Granite models. LLMs enable banks to deploy AI-powered chatbots for personalised, 24/7 customer support, handling routine inquiries and providing financial advice, allowing human agents to focus on more complex tasks. For instance, Klarna, the Swedish BNPL company, uses an AI-powered customer service assistant integrated into their app. This OpenAI-based assistant manages tasks ranging from product selection to refunds and disputes, offering human-like responses thanks to generative AI.
Before we celebrate the successes AI brings to user experience, personalisation, and security in financial services, Amanda Mickleburgh from ACI Worldwide emphasised the importance of understanding what it truly takes to implement AI successfully. AI relies heavily on human input and proper coding, following the old saying, ‘garbage in, garbage out’, poor input leads to poor outcomes.
Amanda also cautioned against setting high expectations for AI, as it’s not a solution to every problem. While AI technology is evolving rapidly with impressive results, the human role remains critical. Humans are essential for asking the right questions, interpreting data, and monitoring results. Missteps, such as incorrect data or misinterpreted questions, can lead to false positives and hurt customer experience.
To avoid this, Amanda stressed the need for continuous validation—regular checks to ensure AI is making accurate decisions. She also highlighted the value of leveraging ISO 20022. ISO stands for a richer data standard that offers financial institutions new ways to improve payment messaging and strengthen their anti-money laundering (AML) and fraud prevention efforts.
But the discussions weren't just focused on AI. Dale Laszig from DSL Direct, along with her expert panel, explored some of the hottest trends in identity.
Interoperability – Great in theory, but can we achieve it across different levels? While the EUDI Wallet aims to create interoperability across the 27 EU countries, questions remain about how seamlessly this will be achieved, according to Jamie Smith from Mission.
Biometrics – Biometrics are unique, difficult to replicate, and convenient due to their speed. However, they come with limitations, including accessibility concerns and privacy risks. For instance, even government-level systems like Aadhaar have experienced breaches.
Commoditised fraud – Anywhere there's money to be made, fraud will follow. Fraud as a service has emerged, providing tools, motivations, and incentives for fraudsters. To combat this, Armen Najarian from Sift offered two key strategies: ‘Hug your haters’ and ‘Act as a fraudster’. The first encourages companies to listen to negative feedback—haters often think outside the box and reveal what’s wrong with your business. The second suggests thinking like a fraudster, who is less bound by rules and regulations. Najarian advises hiring reformed fraudsters, who can bring valuable expertise in identifying vulnerabilities and preventing fraud.
Finally, the panel raised the question: Do we have the right tools to stay ahead of fraud, especially in the age of AI? While Generative AI (GenAI) has introduced deep fakes, it also provides better ways to understand customer data, which can help businesses strengthen their defences.
As we try to stir the rapid advancement of technology, it's clear that the financial industry faces numerous threats, from sophisticated fraud tactics to evolving regulations. In this environment, technology alone isn't sufficient; organisations must also invest in talented professionals and data scientists who are curious, adaptable, and committed to long life learning. Collaboration and data sharing emerged as vital themes during the discussions—overcoming regulatory, geographical, and cultural hurdles is essential, as it truly takes a network to fight a network. Moreover, we must remember that behind every case of fraud are real people, often the most vulnerable members of our society.
Identity Day by Caf was an exceptional event that provided valuable insights into financial crime from various perspectives. I gained a deeper understanding of what it is, how we can combat it, who it affects, and the challenges we face. I left feeling reassured that I was not alone in this fight.
Thank you, Caf, for inviting The Paypers to be a part of this important conversation. We look forward to future editions!
About Mirela Ciobanu
Mirela Ciobanu is Lead Editor at The Paypers, specialising in the Banking and Fintech domain. With a keen eye for industry trends, she is constantly on the lookout for the latest developments in digital assets, regtech, payment innovation, and fraud prevention. Mirela is particularly passionate about crypto, blockchain, DeFi, and fincrime investigations, and is a strong advocate for online data privacy and protection. As a skilled writer, Mirela strives to deliver accurate and informative insights to her readers, always in pursuit of the most compelling version of the truth. Connect with Mirela on LinkedIn or reach out via email at mirelac@thepaypers.com.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now