AI-powered fraud,trust, and proactive prevention in digital banking
This article details a joint webinar hosted by Qorus and Signaturit Group that examines the "trust paradox" facing banks as they balance rapid digital services with sophisticated AI-powered fraud. It features expert perspectives on emerging threats like social engineering, the upcoming eIDAS 2.0 framework, and the shift toward proactive security measures such as behavioral biometrics to safeguard customer trust.
The Trust Paradox: Can Banks Be Both Fast and Safe in the Age of AI-Powered Fraud?
In the digital economy, speed is currency and trust is the bedrock. This central challenge—the "trust paradox"—was the focal point of a recent joint webinar hosted by Qorus and Signaturit Group, titled "The Future of Secure Digital Banking: Best Practices for Fraud Prevention". As Jan Uriga, Senior Advisor for Qorus and the session's moderator, observed, the ease of banking for legitimate customers can unintentionally create pathways for malicious actors. Navigating this tension is no longer just a technical hurdle; it is a fundamental business and data question focused on preserving the most valuable asset a bank possesses: trust.
The discussion brought together a panel of experts: Pierre Quintard, Senior Account Manager at Signaturit Group; Ivan Ivanov, Director of Retail Banking at Bulgarian American Credit Bank (BACB); and Viktor Tkatšenko, Head of AML and Security Department at Citadele banka.
The New Battlefield: Social Engineering at Scale
The nature of financial fraud has shifted toward the customer rather than just the digital perimeter. The most pervasive threat is now authorized push payment (APP) fraud, which Ivan Ivanov described as an "all green" problem. In these cases, every security check passes because the actual account holder—manipulated by social engineering—legitimately logs in and authorizes the transfer themselves. AI has enabled these frauds to move from opportunistic scams to industrialized, scalable attacks.
This evolution creates a dangerous narrative that erodes foundational trust. Viktor Tkatšenko recounted a telling anecdote regarding public perception: after sharing his thoughts on fighting fraud in a local newspaper, he saw comments accusing banks of actually "helping fraudsters to conduct the crime". This highlights the reputational damage banks face, even when they are working to safeguard funds. This risk is magnified by infrastructure vulnerabilities; as Ivan Ivanov emphasized, if a third-party partner or cloud provider is compromised, the bank carries the reputational damage even if the vulnerability was not within its own system.
AI: The Double-Edged Sword of Attack and Defence
Artificial intelligence acts as both a primary threat and a powerful ally. On the risk side, Pierre Quintard noted that fraudsters are using AI to probe video-based "proof of life" controls with techniques like morphing, which blends a real identity with another face to deceive automated systems. However, AI also dramatically improves real-time monitoring by identifying suspicious patterns and behavioral abnormalities. Viktor Tkatšenko explained that banks are now "fighting fire with fire" by using AI to check if documents provided by customers were themselves generated by AI.
Trusted Data and the Rise of Digital Wallets
The industry is shifting from simply accumulating data to securing trusted, source-based verification. Pierre Quintard described how open banking allows institutions to "grab data at the source"—such as government databases or utility companies—rather than relying on customer-uploaded photos, which reduces fraud risk.
This trend will accelerate with the eIDAS 2.0 framework, which aims for 80% of European citizens to have a digital identity wallet by 2030. By December 2027, banking institutions will be required to accept these digital IDs. While this could streamline KYC processes by allowing verified attributes to be reused across institutions, Quintard noted that the industry is still determining the limits of what will reside in state-backed versus private wallets.
The Future of Trust: Proactive Prevention
Looking toward 2030, the focus is shifting to proactive prevention through education and continuous authentication. Viktor Tkatšenko argued that educated customers result in fewer fraudulent cases and false positives. Furthermore, Ivan Ivanov predicted that by 2030, the best prevention may lie in behavioral biometrics, which continuously monitor how a user types or swipes to detect patterns of coercion or account takeover in real time.
Ultimately, the path forward requires a human-centric approach. Banks must strike a delicate balance between security and user experience, perhaps through dynamic models where low-risk customers are fast-tracked while high-risk profiles undergo deeper checks. As Pierre Quintard concluded, it all comes down to a "difficult equation" centered on the human client. The banks that solve this will be those that integrate advanced AI tools while making customers feel secure without feeling shackled.
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