How can legal firms resist fraud in the age of AI?
You may have seen stories emerging over the last few months of AI-generated ID and passport images that are apparently good enough to fool identity verification systems.
No longer are fake passports the province of dodgy dealers in back alleys: now, thanks to generative AI, anyone can create an authentic-looking identity document with just a few prompts.
Although ChatGPT and others will typically refuse a potentially illegal or inappropriate prompt, simply reframing the request with some clever wording will produce the desired outcome.
With the same process, it’s also possible to spoof driving licences, birth certificates, and other ID cards.
What is the danger of generative AI?
With a fake passport, criminals can potentially open bank accounts and apply for credit, take over existing accounts, alter contracts, and manipulate legal documents.
This is the new frontier in the fight against money laundering and identity fraud. And as AI tools get more sophisticated, so too will the risks.
In this new reality, rushing into onboarding can lead to serious problems. An incomplete onboarding can allow these AI-generated documents to slip through the cracks, potentially giving bad actors access to legal services, property, and credit.
That, in turn, exposes your firm to fraud risks and regulatory attention, with all the reputational damage that implies.
How can legal firms tackle the challenge posed by AI?
In the face of the evolving challenge of AI, firms using only simple photo identification are no longer doing their due diligence.
Law firms, banks, fintechs, property firms, conveyancers… all of them must reevaluate the way they identify and respond to identity fraud.
But so too must the regulators. They must demand a greater level of vigilance from firms as they onboard new customers, supporting them to spot AI-generated frauds and spoofs.
Tackling this threat requires future-proofing your firm’s onboarding against bad actors. That’s why choosing the right compliance platform is so important.
Checkboard’s onboarding and identity verification process uses biometrics to cross-reference an uploaded ID document against a selfie.
Also known as a liveness check, this helps firms prove an individual is a real person rather than a spoofed image. This improves fraud detection and protects businesses, representing a huge improvement over a simple ID upload.
Going beyond ID verification
But firms shouldn’t rely on ID verification alone, and Checkboard helps you shore up your defences by cross-referencing this against an individual’s credit history, national insurance number, home address, property ownership information, and more.
And when tackling money laundering, Checkboard also checks AML records, sanctions lists, and PEP lists to gain a holistic picture of each individual. This seriously reduces the chance of a spoofed, AI-generated ID passing muster.
Despite the depth and breadth of these checks, Checkboard is also quicker. Firms report a reduction in due diligence time by 80%, with users able to upload and confirm their identity in just a few short steps.
This means firms can spend more time serving their customers and less time worrying about threats, without compressing their compliance.
It boosts confidence, improves customer service, and satisfies the regulators.
To find out more, get in touch with Checkboard today.
A version of this article was originally published on Legal Futures.
