Money20/20 Europe Exclusive Video: Sumsub on Fighting Fraud
In today’s world of financial services, fraud represents one of the leading challenges for incumbent banks, fintechs and other organisatons to overcome.
In our exclusive interview from Money20/20 Europe this June, we speak to Martin ten Houten, Vice President of Business Development for Europe at Sumsub, who provides his insights on the current state of fraud, its impact and the innovative solutions being deployed to combat it.
The Alarming Rise of Fraud
While fraud manifests in numerous forms, today, Authorised Push Payment (APP) fraud stands out as the leading form of malicious activity today. "We've seen Visa report that one in three consumers are a victim of APP," notes ten Houten. Sumsub has also seen account takeovers (ATO) rise a staggering 155%.
“There have been high profile cases including a finance worker from a major Hong Kong institution who was the victim of deepfake technology, who drove a US$25m payment out to a false individual,” he continues.
"Fraud comes at a massive price, and it's crucial that we leverage AI to combat these sophisticated threats," emphasises ten Houten.
The Cat-and-Mouse Game with Fraudsters
Just as technology evolves, fraudsters are evolving alongside it to stay one step ahead of security measures.
Deepfake technology, for instance, has seen a tenfold increase in usage globally within just a few years. There's been a 200% increase in the cryptocurrency sector alone, while fintech has seen a staggering 500% rise.
"It's a pervasive challenge, affecting not just financial services but also other areas like elections," says ten Houten. Sumsub's internal reports show a 245% increase in non-financial deepfake use from Q1 2023 to Q1 2024.
To combat this, a blended approach using multiple tools is essential. "We need to monitor consumer behavior and provide real-time risk assessment scores," ten Houten explains. This involves effectively using tools such as Know Your Customer (KYC) elements, Identity Verification (IDV), email and phone assessments and financial transaction monitoring.
The Importance of Ongoing Monitoring
According to Sumsub research, only 30% of fraud is detected during the onboarding stage, with 70% occurring post-onboarding. This underscores the need for continuous monitoring.
"It's crucial to focus on ongoing monitoring, not just the initial onboarding," ten Houten asserts. Sumsub's open architecture platform facilitates this by integrating various technologies to monitor applicants continuously after they have been onboarded.
Sumsub's Growth and Innovation
Sumsub's commitment to combating fraud has driven significant growth. With over 2,000 customers and nine years in the industry, the company has made a name for itself in sectors like crypto, gaming and fintech.
"We're now focusing on expanding into financial services, particularly banking, globally," ten Houten shares. Sumsub is concentrating its efforts on key markets in Europe, APAC, and the Middle East.
Innovation remains at the core of Sumsub's strategy. "We're continuously improving our deepfake technology, fraud detection networks, and other tools to capture as much of that 70% of fraud that occurs post-onboarding," says ten Houten.
This relentless focus on innovation and comprehensive fraud prevention is driving Sumsub's accelerated growth and success today.
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