by Babak Hodjat, VP of Evolutionary AI at Cognizant
Many banks and other financial services institutions (FIs) are beginning to recognise the benefits of AI-driven solutions as a way to get ahead in the market and challenge the competition. Amongst many other benefits, the technology enables organisations to offer hyper-personalised customer experience, dramatically improve internal decision making, and drive operational efficiency. However, many businesses are struggling to move beyond the experimental phase and reach actual AI deployment. It is those organisations that are at risk of being left behind.
The financial world has already been transformed by AI, and this transformation is continuous. A new breed of AI, known as ‘evolutionary AI’ has begun to further accelerate innovation. It is capable of automatically designing itself with little need for explicit programming by humans – innovatively creating complex AI models, and optimising decisions considering multiple scenarios.
This technology is revolutionary for industries across the world, but in particular it is set to transform the financial services sector. Enabling businesses to spot novel strategies that would never have been identified by human data scientists, and, in turn, allowing companies to take full advantage of today’s massive data sets – evolutionary AI will soon be a vital tool in all FIs’ arsenals.
The nuts and bolts of evolutionary AI
Emerging technologies that enable AI algorithms to design themselves are allowing organisations to transcend human limitations. Evolutionary AI operates iteratively. Firstly, it randomly generates a set of potential solutions to form an initial population and assigns a score to each solution based on how well it performs relative to other solutions. In the second round, it retains the solutions that performed best, perhaps only 5% of the total, and recombines their components, sometimes “mutating” them to create a new population. This new population is then tested, and the process begins again. Over multiple generations, the appropriate components of the more successful solutions become increasingly prevalent in the population, and eventually a solution is discovered that yields the best outcomes.
Advantages and use cases
Compared to human design, evolutionary AI can be deployed far more quickly, avoids biases and preconceptions, and typically performs better. Furthermore, the chosen model will evolve and improve over time based on new data.
Evolutionary AI can be applied in a wide variety of areas at FIs. Some examples include designing quantitative trading strategies to maximise returns while minimising risk and loan underwriting. Rather than relying on human analysis, evolutionary AI solutions can quickly analyse all the combinations of relevant variables to create models that more accurately assess the risk of default by a potential borrower.
A recipe for success
In order to reap the benefits of the technology, FIs should focus on the following:
- Responsible AI – Behave in ways that make customers and employees comfortable, i.e. not making decisions that are unethical or exhibit bias. Companies need to monitor them to ensure they continue to act appropriately, as they learn and evolve.
- Viewing AI through a business lens – Having AI projects managed by cross-functional teams with business executives in the lead is a good place to start. Companies also need to look across their organisations to identify opportunities to generate concrete business value from AI — not only in reduced costs but also in boosting revenues by delivering enhanced customer experiences and through improved decision-making.
- Enhance data management – AI applications depend on access to timely and accurate data, which is a challenge for many FIs that have fragmented data architectures with multiple legacy systems. Companies need to identify which types of data are required for each AI project and ensure they can be captured in an appropriate format.
- Approach with speed and caution – AI projects need to be rolled out quickly, while at the same time be rigorously measured, so failures are terminated promptly while successes are moved into production.
The sophistication of AI technology is set to significantly improve over the coming years as it continues to design and test itself. As a result, it will become more critical to the productivity of FIs, and soon businesses will recognise it as a vital tool for consulting on important business decisions. It will not be long before humans and AI are working alongside each other, with robots handling routine tasks, enabling employees to focus on more complex and sensitive activities. Delivering more value together than either could on their own.
BEFORE THE INK IS DRY: CORRECTING BIOMETRIC SPOOFING MYTHS
Eric Setterberg, System Design Engineer at Fingerprints
Biometric authentication is highly robust, and the latest solutions offer considerably greater security than their authentication predecessors: PINs and passwords.
But as biometrics moves into new areas such as payments and access control, privacy and security concerns are rising. Biometrics has long been subject to scrutiny, with many elaborate examples of people working to trick biometric sensors to crack devices in the media and online.
To ensure the continued adoption of biometrics, it is important to shine a light on the reality of biometric spoofing.
The Evolution of Biometric Solutions…
The first use of fingerprints as forensic evidence was in an Argentinean court case in the late 1800s. With the technology still in its infancy, this was done manually and by eye, comparing latent residual prints lifted from crime scenes to charts of inked fingerprints obtained from the suspects at arrest.
A few decades later, the FBI began collecting fingerprints of criminals and civilians. They also introduced the automated comparison of fingerprints by computers in the 1970s. These “traditional representations” have now been standardized by ISO and ANSI.
… and their Spoofs
The earliest and simplest of these matching devices were easy to spoof. Really, all you needed was a photocopy or a good image of a fingerprint to make a successful spoof.
But as biometrics moved to more advanced technology, the game for biometric ‘spoofers’ has changed and the task of crafting fake fingerprints is considerably more difficult.
The biggest boost for biometric security, however, came with its introduction into mobile phones.
How Mobile Changed the Game
Before the widespread integration of fingerprint sensors in smartphones, the technology underwent significant evolution. No operator wanted to use large biometric sensors in modern phone designs. Sensors had to become much smaller to reach the perfect price and design point for the mobile world, but this meant needing to capture data from a smaller surface area of the finger.
To maintain the security of these smaller sensors, algorithms evolved significantly in order to utilize a greater amount of data per unit area. These mobile-driven hardware and software changes resulted in the optimized image capture of modern touch sensors.
As a result, tricking these systems now requires a considerably higher level of detail to be reproduced correctly for a match to be successful, far beyond rudimentary gummi bear spoofs and photocopies…
Setting the Perfect Spoofing Scenario
Compromising fingerprint authentication via spoofing can still be done, even with all the technological advancements. However, it now requires considerable care, skill, money, and time. And to start, a good latent print…
To retrieve a latent print that’s high quality enough to work, you either need a willing volunteer to lend you their finger, or the commitment to stalk a victim until a viable fingerprint can be retrieved. Even with a decent latent print, modern spoofs then require advanced photoshop skills and/or a lab to successfully convert latent prints into effective moulds.
So – what about those articles boasting how easily they have hacked the latest smartphone device’s fingerprint sensor?
In fact, there are only two instances of fingerprint spoofing seen in the media nowadays: proof of concept and cooperative spoofs. Lay enthusiasts and media go through the effort of setting up a lab to create spoofs with latent fingerprints either from themselves or cooperative volunteers. Even the most successful of these take months of work, a highly skilled team, and the perfect scenario of circumstances.
Put simply, the effort required for spoofing modern fingerprint sensors cannot be applied at any scale. Each biometric spoof needs to go through the same laborious process and clinical conditions. So, if you can bring together a willing group of spoofing enthusiasts, tricking a biometric device could earn you fifteen minutes of fame on the internet, but it is likely to be conducive to a successful criminal business plan…
A “How” Without a “Why”
Spoofing biometrics remains technically possible, and there will always be those up to the challenge of trying to hack the latest technology. But the reality is that modern biometric solutions require more time, skill, and frankly, luck, to successfully spoof than ever before. Not to mention that tireless R&D work is continuously strengthening spoofing resistance. And, as use cases start to combine multiple biometric authenticators, such as combining fingerprints with face or iris to perform an authentication, spoofing will only become more complex.
By comparison, hacking PINs and passwords is considerably simpler and more scalable, making it far more lucrative. And, criminals generally take the path of least resistance.
For the average consumer, greater use of biometric authentication is not only a means of simplifying authentication, but dramatically improving the security of their devices, applications, and personal data. With PINs and passwords still the most common authentication method outside of mobile, it is imperative that the true security and advanced nature of modern biometric authentication solutions are understood.
ARE WE AT THE TIPPING POINT FOR GLOBAL BIOMETRIC PAYMENT CARD ADOPTION?
By Vince Graziani, CEO of IDEX Biometrics ASA
Following the coronavirus outbreak, consumers are ready to go cashless more than ever before. With many businesses discouraging the use of cash because of hygiene questions that surround handling money, contactless payments are front of mind to avoid touching pin pads.
But in an increasingly cashless ecosystem, there is a growing threat of card fraud from the lack of authentication. So we have reached the point where contactless payments need to be made more secure in order to ensure transactions are hygienic, convenient and free from the risk of fraud.
To resolve this, it’s time for biometric smart cards to reach the market on a global scale. By integrating fingerprint sensor technology into a payment smart card, it can provide convenience and greater security to prepare for the cashless economy. The user can pay for transactions by authenticating their finger on their own card and without having to touch a pin pad or sharing their card with the retailer.
Consumers want biometric smart cards in their wallets now
We know that consumers are ready and willing to embrace biometric payment cards. Thanks to scan-to un-lock functions on smartphones and finger or face scanning at passport control, consumers are already familiar with biometric technology in their everyday lives. The acceptance of that technology in a payment card is no lower. In particular, IDEX research revealed that 41% of consumers would be willing to adopt a fingerprint biometric payment card.
However, banks and card issuers aren’t responding to that demand with the speed that consumers need. As early as 2018, tech magazine Wired announced that biometric payment cards were ready to hit our wallets. But following more than 15 years of research and development, and a number of biometric payment card trials around the globe, we still don’t have biometric fingerprint payment cards in our hands.
So why haven’t banks responded to consumer demands and embraced global adoption of biometric cards?
Jumping the global adoption hurdles
Well, according to analysis from Goode Intelligence, there are several hurdles to overcome before biometric payment cards can be shipped to users in their millions – including cost and scheme certification.
Despite being hailed as the future-tech solution to end our use of cash and cards, mobile payments haven’t reached anywhere near the expected level of public adoption in the UK. As of 2019, only around 19% of the UK population used mobile payments. Of course, the fact that Apple, giants in the payment app space, launched a physical credit card last year, and that Google is set to follow suit is further proof of the customer demand for bank cards over mobile payments.
Therefore, it’s clear that the majority of the population still prefer the ease and familiarity of contactless cards. In fact, IDEX research found that six-in-ten (60%) UK consumers would not give up their debit card in favour of mobile payments, so it’s crucial that banks continue to evolve smart bank cards for the next generation of payments.
Breaking down the cost barrier
Of course, cost caused by the manufacturing complexity of biometric payment cards has long been seen as the main barrier to mass adoption. Initially, the cost of the card was considered so prohibitive that a charge would have to be passed on to the end-user. But now this barrier looks set to come down. Thanks to new low-cost sensor technology combined with an enhanced biometric-system-on-chip ASIC, the cost of materials required to build a biometric smartcard, has been drastically reduced.
If card issuers embrace the new fingerprint system technology, it will lead to an improvement in manufacturing processes and yields. The sensor technology will substantially reduce the overall time to market and ultimately reduce costs to the bank and the end-user. Therefore, this development will help manufacturers to overcome the barriers preventing mass adoption of biometric smart cards.
Towards global adoption
We’re now at the tipping point. Consumers today are demanding greater security and hygiene in their payment process. They want biometric payment cards now to make sure their payments fit the bill in this new world.
Many of the barriers to global adoption are no longer the concerns they once were. With the obstacles overcome, the adoption of biometric payments cards is likely to start ramping up in 2021. Banks and smartcard providers should now adopt biometric payment cards on a global scale, to prepare for payments of the future.
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