Reducing the impact of AI-driven fraud in 2025

Driven by evolving AI technologies deepfake software, automated phishing systems, chatbots and advanced data analytics, are enabling fraudsters to create highly personalised and convincing fraudulent schemes, quickly and easily.

This is at a time when fraud and scams are at record levels according to the UK’s Financial Ombudsman Service. They have disclosed that consumers lodged 8,734 fraud and scam complaints in the three months April – June 2024, up from 6,094 over the same period in 2023. Furthermore, Action Fraud recently highlighted that banks were named in more reports of fraud in the last financial year.

As a result of these figures financial institutions need to take rapid action to lessen the volume of fraud as we enter 2025, to protect their customers, bottom line and reputation.

Customer contact data quality is crucial

The quality of contact data is critical to the effectiveness of ID processes, influencing everything from end-to-end fraud prevention to delivering simple ID checks; meaning more advanced and costly techniques, like biometrics and liveness authentication, may not be necessary.

The reliability of the verification process is improved with access to accurate customer contact information, such as name, address, email and phone number. Only then can ID verification technology confidently cross-reference the provided information against official databases, or other authoritative sources, without discrepancies that could result in false positives or negatives.

Fraudsters exploiting inaccuracies in contact data to create false identities and manipulate existing ones is a growing issue. By maintaining clean and accurate contact data ID verification systems can more effectively identify suspicious activity and prevent fraud. For instance, inconsistencies in a user’s phone or email, or an address linked to multiple identities, could be a red flag for extra scrutiny.

Address, phone and email verification 

The foundation of contact data quality is usually recognised as address verification. By having access to up-to-date customer addresses it’s much easier to match and verify identities across multiple sources. Therefore, verifying the accuracy and legitimacy of an individual’s address should be the first step in any identity related process, with any discrepancies between a claimed address and official records highlighting a potential fraudster.

It's only by identifying these inconsistencies early that ID verification technology can help to mitigate risks, ensuring only legitimate users are granted access to services, thus protecting both their business and customers from fraud. 

Furthermore, address verification plays an important role in regulatory compliance, by ensuring that the address information provided meets know your customer (KYC) and anti-money laundering (AML) regulatory standards.

Don’t forget the role of phone and email verification as part of a comprehensive ID verification process, and therefore in preventing fraud. The capability to verify all three contact channels supports enhanced security by filtering out fake or high-risk contact information, enhancing the accuracy of the ID verification process.

Autocomplete services

A great way to obtain accurate customer contact data is to use autocomplete or lookup services.

With these tools it’s possible to deliver accurate address data in real-time by providing a properly formatted, correct address at the onboarding stage, when the user starts to input theirs.

These services are vital because around 20 per cent of addresses entered online contain errors; these include spelling mistakes, wrong house numbers, and incorrect postcodes, as well as inaccurate email addresses and phone numbers, typically as a result of errors when typing contact information. A further benefit of these tools is the number of keystrokes needed when typing an address is cut by up to 81 per cent. This speeds up the onboarding process and improves the whole customer experience.

It's possible to deliver first point of contact verification across email and phone using similar technology, so these valuable contact datasets can also be verified in real-time.

SaaS data cleaning platforms

Another option is to use a scalable data cleaning software-as-a-service (SaaS) that can be easily accessed, and doesn’t require coding, integration or training to use, to deliver address and wider data quality in real-time across existing customer databases. It can cleanse and correct contact data and match records, ensuring no duplication. It offers the opportunity for data standardisation, validation, and enrichment via a single, intuitive interface, to ensure high-quality contact information across multiple databases. It can deliver this with held data in batch and as new data is being gathered. Outside of SaaS, such service capabilities can additionally be accessed via cloud-based API (application programming interface), Microsoft SQL Server or deployed on-premise.

eIDV is necessary

It’s not enough to only undertake data hygiene practices to deliver KYC and prevent fraud. Using an electronic identity verification (eIDV) platform is essential.

These ‘always on’ tools can, in real-time, cross-check the names, addresses, email addresses and the phone numbers provided by prospective customers when remote onboarding – providing a good customer experience, while helping to prevent fraud. For best results it’s recommended to source an eIDV platform with access to billions of consumer and business records from reputable sources from around the world, such as from government, utility and credit agencies. This ensures an effective ID verification and therefore customer onboarding service wherever in the world the user is.

When compared with manual checks using such a tool is considerably quicker, more accurate and cost-effective way to undertake ID verification and prevent fraud. The technology requires no additional staffing or training costs, and minimises the risk of human error.

Also, eIDV can be accessed via any delivery mechanism – SaaS and cloud API - and can be scaled up or down according to the needs of the user.

In 2025 evolving AI will continue to supercharge fraud and scams. Therefore, to best protect themselves and their customers those in financial services need to focus their efforts on delivering data quality with customer contact data, and ensure they have access to an effective eIDV service.