The Australian Federal Government recently unveiled its 2021 budget. Within it, the Government dedicated $1.2 billion to its digital strategy, including $50 million to improve cybersecurity.
While it’s a step in the right direction, there are gaps in digital investment that require further scrutiny. For example, the way cyber financial fraud is managed was not addressed in the Federal budget. A recent report by GBG and The Asian Banker found Australian financial institutions are spending far below their regional counterparts when it comes to fraud prevention technology. With additional support from the Government, this number could - and should - be growing to keep pace with the new financial norms in this country.
The COVID-19 pandemic, which remains an international emergency, means financial institutions cannot afford to be negligent when it comes to protecting their customers against fraud. As a result of the pandemic, online banking use has surged amongst Australians, according to Boston Consulting Group. A recent study found more than 17% of Australians increased their use of mobile banking apps during the pandemic, with online banking enrolments increasing to 81% of the population.
With Australians becoming increasingly comfortable with online banking, it lowers their guard towards password development and sharing, and general personal security online. Improving cybersecurity to enable digital strategy would require a specific commitment around protecting Australians from data mining and online identity theft.
To that end, the Australian government would need to double down on its digital spending and consider how best to invest in and protect citizens from the encroaching dangers of Financial Crime 4.0.
Speaking with The Australian earlier this month, Carol Chris, Regional General Manager of GBG, noted that while both digital and cybersecurity investments are critical to keeping Australia safe and technologically competitive against its global counterparts, “these investments require holistic, strategic, and measurable approaches to be effective.”
Ms. Chris also spoke to StartUpDaily, expanding on her thoughts that “AI holds the key to outpace fraudsters’ use of innovative methods to commit financial crimes,” noting the industry won’t recognise the true benefit of AI if these innovations are kept separate from the services offered to everyday Australians.
Companies like GBG are already pioneering the use of AI in identity verification and fraud detection and prevention. For example, earlier this year we expanded our identity verification solution, greenID, to assist Australian financial institutions with the challenge of effective cyber fraud prevention. Tapping into a vast array of AI technologies, the greenID Digital Identity Verification Platform offers a total end-to-end solution of biometric and document verification, data matching, and data intelligence. On fraud detection and prevention, we have also expanded our Digital Risk Management and Intelligence platform to include supervised, unsupervised and custom machine learning model to help detect missed fraud and decrease false positives.
The Australian government today is witnessing its citizens gravitate to online banking due to the pandemic, protecting them from increasingly sophisticated cyber financial fraud is tantamount to the future success of the financial services industry.
Carol Chris’ full commentary as follows
“We cannot overlook the threat of cyber financial fraud.
This year, the government has dedicated $1.2 billion to its digital strategy, including $50 million to improve cybersecurity in the government. While both digital and cybersecurity investments are critical to keeping Australia safe and technologically competitive against our global counterparts, these investments require holistic, strategic, and measurable approaches to be effective.
For example, how cyber financial fraud is going to be managed has not been addressed in the federal budget, despite the fact that this has been a rapidly growing threat for Australians and Australian businesses, accelerated by the pandemic. Data mining through cyber attacks and leveraging advanced technology to create spoofs, synthetic IDs, and deepfakes are just some of the many ways sophisticated crime syndicates around the world are taking advantage of Australians’ growing use of digital channels, including consumers’ increasing levels of comfort with managing their finances online.”
“AI needs to be embedded in our approach to businesses’ digital readiness
The budget’s commitment of $53.8 million over four years to establish the National Artificial Intelligence Centre to drive AI adoption is a promising first step towards empowering Australian businesses with this evolving and valuable technology. The impact of this investment and growing availability of the technology will be measured by how well AI initiatives are embedded into industries in ways that build overall digital readiness.
For example, the financial services industry, like many others, experienced accelerated digital transformation in 2020, and is now focusing on how to build and sustain digital trust with customers. AI holds the keys to outpace fraudsters’ use of innovative methods to commit financial crimes and further accelerate financial institutions’ digital capabilities and operational efficiencies, however the industry won’t experience the true extent of these potential benefits if the AI policies in place are actioned in siloes away from the financial executives delivering everyday services to Australians.
Artificial Intelligence (AI) will be a vast contributor to Australian businesses’ digital readiness, as well as the ability to track and measure effectiveness. The budget’s commitment of $53.8 million over four years to establish the National Artificial Intelligence Centre to drive AI adoption is a promising first step towards empowering Australian businesses with this evolving and valuable technology.”