Julian David
CEO, techUK
Innovation in financial services has empowered companies and individuals in their financial decisions, making transactions faster, cheaper and more efficient.
The deployment of technology has been key to addressing fraud, particularly in a fast-evolving environment. From the adoption of digital identity to the increased use of artificial intelligence and regtech, fintech and the technology sectors have developed critical new solutions to financial crime.
Urgent need for a viable regulatory framework
Online fraud has a profoundly corrosive effect on the public’s trust and subsequent willingness to engage with digital innovation. When it comes to financial services, ensuring reliable, safe and secure authentication is critical. From onboarding new customers to transferring money to the correct recipients, fraudulent activities can inflict a devastating impact on both consumers and the wider economy.
Digital identity is already being deployed by fintech and the financial sector to combat fraud, but also to increase speed and efficiency of use for the consumer. In the war against financial crime, it has become a powerful tool but to make the most of this technology the UK needs a robust, effective and flexible regulatory framework in place as soon as possible.
Online fraud has a profoundly corrosive effect on the public’s trust and subsequent willingness to engage with digital innovation
Should the UK fail to get digital ID right and miss the opportunity to drive forward the market, there is a real risk that it falls even further behind those other jurisdictions globally that have already recognised the importance of digital identity in their economies.
Empowering financial services firms
Besides the development of game-changing solutions such as digital identity, the emergence of new technologies such as AI has enabled companies to detect new threats and ensure better and easier compliance with regulations.
With technologies such as AI, machine learning, robotics, distributed ledger technology and biometrics, fintech and technology companies can enable regulatory compliance to become both the sword and shield against economic crime. Such a benefit not only reduces the burden of cost and complexity but also improves the capacities of financial services firms by automating compliance processes.
A greater level of flexibility and clarity in the legislative framework whilst maintaining adequate safeguards will be essential to bolster innovation and empower financial institutions with modern digital tools to prevent and tackle fraud.
