datatalk ep 159 final pod

Experian's Chief Innovation Officer, Kathleen Peters, discusses the 2024 future fraud forecast and the growing threats of fraud. She emphasizes the role of generative AI in making fraud more accessible and highlights the need for consumers and businesses to be cautious. She also mentions the increasing concern of empty retail return fraud and the resurgence of bank branches as a way to build trust with customers. Peters provides advice on how to protect oneself from fraud, including being cautious of suspicious messages and verifying information. Hello friends, welcome to this episode of Experian's Data Talk podcast and video show featuring data science leaders and technologists from around the world. At Experian, we believe data has the power to transform lives and create a better tomorrow. And this show is dedicated to data and tech topics that matter to all of us. My name is Destiny White, and on Data Talk, we are talking with data science and tech leaders around the world. This week, we welcome back Kathleen Peters, our Chief Innovation Officer at Experian Decision Analytics. In this conversation, we take an in-depth look into Experian's 2024 future fraud forecast. We dive into the role of generative AI in today's fraud landscape, and we learn about the different types of fraud attacks that are most prevalent. Kathleen also shares invaluable advice on how consumers and businesses can stay protected against fraudsters. Kathleen is at the forefront of redefining how we approach decisioning, analytics, and identity. With nearly two decades of experience at Silicon Valley, her journey has been marked by relentless pursuits of innovation and a deep understanding of both technology breakthroughs and business model disruption. Today, she's here to share her wealth of knowledge and her unique perspective on innovation within data. Here's our conversation. Welcome back, everyone, to Data Talk. I'm your host, Destiny White, and I am thrilled to have our special guest for today, Kathleen Peters, who is our Chief Innovation Officer at Experian Decision Analytics. Experian recently released its annual future of fraud forecast, and I am so excited to dive into some questions for Kathleen about the top up-and-coming fraud risks that businesses and consumers should be on the lookout for. Kathleen, it's so great to have you today. How are you doing? I'm doing really well. It's really exciting to be back with you again, Destiny. Awesome. It's really great to have you again. So, would you be able to tell us more about the annual fraud forecast and why exactly Experian does one every single year? You bet. So, our 2024 fraud forecast this year is one where we are revealing five different fraud threats or trends that are affecting businesses and consumers in the year ahead. And when it comes to fraud, fraudsters are really opportunistic, and so they're going to leverage new and emerging technologies. They're going to sense what's going on in kind of the macroeconomic environment and even social trends to see what they can leverage to perpetrate new fraud. So, each year when we do this forecast, what we're trying to do is inform consumers and businesses so they can become more aware of the risks that are growing in the year ahead. And they can be informed, they can take steps to protect themselves from these new types of fraud. Wonderful. And Kathleen, with the booming popularity of generative AI, it has definitely brought pretty convenient benefits to consumers and businesses alike. However, from what I understand, it's also made fraud more accessible. So, how exactly is generative AI affecting fraud? No, it's a great question, and there's probably nothing more buzzy of a topic than gen AI right now. So, you're right, Destiny. The generative AI capability is certainly empowering consumers and businesses to do really exciting and creative things, but the power of generative AI has really democratized what was once only the domain of data scientists or mathematicians and engineers, and now anybody can use it. There's free tools available on the web so we can all try it out. Well, that means it's easier for fraudsters too. So, we're kind of seeing this do-it-yourself DIY fraud, which is kind of a little bit scary actually, because it's so powerful that they can create scams that are so realistic and so creative and so believable, it's making us really wonder what we can trust anymore. So, definitely we think this is going to be the era and the year of a lot of really, really interesting DIY fraud, and people just need to be more cognizant that this is out there. They need to look twice and really understand what is that inbound message coming to them. And for businesses, we need to look for ways that we can fight AI with the power of AI. So, using that capability ourselves to make sure we've got good defenses against fraud attacks. Oh, 100%. And speaking of fraud attacks and just different types of technology that's out right now that's scary. The deep fakes, I've heard so many different stories of just impersonations, pretending that they're your job, pretending that they're your family members, and it even looks real. Phone calls look like they are your mom, they look like they're your sister. It's actually terrifying. And with that being said, Kathleen, what are some other types of fraud that consumers and businesses should be wary of? Yeah, no, there's stuff that's more tangible in our daily lives too. So, one of the other forecast items that we've put out there this year is just a growing concern about empty retail return fraud. So, for businesses who are retailers, obviously buying things online is how we do everything now. And so, whether it's the macroeconomic conditions that are making people maybe more desperate, or if it's organized fraud, what retailers are seeing are an increased incidence where people will say, my package never made it, it was never delivered, when in fact it was, and then the business has to write that off as a loss. Or the consumer will receive something and say, oh, I want to return it, but return an empty box. So, this notion of empty returns or false arrivals, this is going to be on the increase this year. And so, businesses need to look at their processes for how they're validating delivery addresses and recognizing repeat return consumers, and maybe repeat offenders as well. So, there's ways for folks to think about that new type of fraud that's being perpetrated and look at their processes to get ahead of that. Another sort of in-person trend, which is fraud related, but I think this is more of a positive news story, and that's the return of bank branches. Bank branches, Destiny, are cool again. So, after years and years of bank branches closing, we are predicting this year that we're going to see a surge and a re-emergence, really a new evolution of bank branches. Wow. It's really fun, as we were putting together our forecast for this year, we've been working on this for a couple months, just a couple weeks ago, the Wall Street Journal ran an article stating that JPMorgan Chase is going to open 500 new bank branches in the next 400 years. Wow. So, I feel like our forecast is already coming true on this one, but it's changing what those branches look like. Bank of America, JPMorgan Chase, they're going into communities, as opposed to just wooden desks behind panes of glass, these are places where people are coming in because consumers want to interact with bankers, they want to build that relationship and that trust. And so, instead of being kind of the bank branch of old, this is where someone can come in and the banker may be holding an iPad, or bringing you to a kiosk, maybe they're going to teach you how to engage with digital banking so you can do it at home or in the branch. It's still the place where consumers are coming in when they need to do a new type of transaction, or maybe you're starting a new business and you want to open your account. So, there's a way now, too, that these branches can be using advanced techniques and even the customer's own device to help do a biometric identity verification, for example. It becomes a more trusted relationship, it can become a more high-tech, endorsed type of relationship, but it's a different branch than we used to know, and I think we're going to see a lot more of them in the coming year. Yeah, that's really good to know, and that's good to hear as a Chase Bank customer myself, and with technology advancing as rapidly as it is now, that's a great idea. That's fantastic to hear that banks will be engaging in communities and putting a face to the bank. Absolutely. It's building that connection, right? I think as we get into this era of AI, trying to make human connections is going to be something people value even more, and they'll want to come into a branch sometimes. They'll want to build that trust and feel that trust, so I think that there's a real opportunity for banks as they consider this, and a nice opportunity for consumers as these are coming into our communities, too. I'm sure that's a growing concern for a lot of consumers, so thank you for covering that and letting us know, and I have a very important question for you, Kathleen, that I'm sure everyone listening is wondering, how can people protect themselves from fraud, and is this even possible in this day and age? It's a great question, and sure, it is. Now, we need to keep in mind that fraudsters are very motivated, often intelligent, organized entities who are doing their best to try and reap the rewards of that fraud. What we can do as consumers is be informed consumers and be cautious, so any time when we're getting those text messages, those phishing attempts, those emails that seem a little too good to be true, they might be a little good to be true, so this is an opportunity to just double-verify again. If you get an emergency message from a family member that seems really off, try to call them back on another number, send a text to them as opposed to just that inbound, because those phone numbers can be artificially presented to you, and it can look like someone is not, but they say, oh, I can't talk right now, this is the boss, I need you to go buy a bunch of gift cards, that's a scam, don't go do that, so, you know, it's just kind of having that extra little bit of a voice in the back of your head that makes you go, hmm, I wonder if this is real, because we're going to see a lot of scams coming forward. One of the things I really want consumers to be on the lookout for is anything that's asking you to immediately send money, so if someone is saying, hey, just Venmo to here, just sell me this money, there are a lot of fresh scams that are trying to get folks to do that very quickly, don't think, just do, and they're catching a lot of people unaware, so take a deep breath, try and verify the situation, and when you need some help, make sure you call someone you trust, or just verify with the retailer or the bank or whoever you're being asked to engage with. Oh, yes, Kathleen, those messages with that sense of urgency, that random sense of urgency, such a red flag, and this is a perfect opportunity for me to share the most recent one. I got an email from Metta basically stating that my page is ready to be deleted, they're going to delete it, because I violated a community guide. You did something wrong, yeah. I know, because I'm like, whoa, what could I have possibly done, it would never happen, and lo and behold, I look close, I look closely into this, because of my slight knowledge just from engaging with experts like you, I looked at the address, and I noticed it's from Eventbrite, and that obviously is not Metta, that's not tied to Metta, so why would it say Metta support at Eventbrite.com? I immediately relaxed my nervous system and realized that's me, again, they have a link, there was a link at the bottom that said, if you believe this is a wrong claim, please click the link below to submit an appeal. Right. So that's just, I'm glad that I have that knowledge and we have these sorts of conversations, because if I were to click that phishing link, anything could have happened. I could have put in my password for Facebook, and then boom, I'm hacked, and then they might learn my password for multiple other platforms, which is why it's also important to make sure your passwords are pretty unique. That's for sure, absolutely, that's such an important point that you made, and because people aren't always there just to get your cash, they're looking for your identity information, they're looking for ways to get your passwords, because once they have that, they can get into all kinds of accounts that you have, and do much more damage than what they might have just asked you to send. So you're absolutely right, really think about password managers, they really do a great job of helping you have a diversity of passwords, not reusing passwords all the time. These are all really good best practices. We just live in a world where this is going to continue to be the world we live in. Things like biometrics are going to help provide another layer of security. So I think that we just need to be open to these new types of techniques, because fraudsters are moving forward, so we need to think about the protections that we use, and moving forward too. And we've been talking a lot about consumers, but businesses need to protect themselves too. And one good thing that I am recommending that businesses do is take a survey of what your fraud estate looks like right now. How well is it doing? Are your fraud losses up, or are they down, are they about the same? Maybe some of the tools or the settings that you have aren't working quite as well as they had been in the past. It might be time for a little bit of a refresh. It might be time to layer in a new capability. This is a great time to take stock. It's the beginning of the year, think of it as the New Year's resolution for your business, to really think about, do I have everything in place to protect myself against the next wave of fraud? That's absolutely amazing advice for businesses, Kathleen, thank you so much. I just wanted to also thank you so much for your time today, and your insights are so crucial, and you will be helping a lot of people today. Just be hyper-aware and hyper-vigilant. Kathleen, as we wrap up this wonderful conversation, this valuable conversation, can you let us know what type of offerings Experian has to help protect identities and prevent fraud? You bet. As a trusted industry leader and provider of fraud prevention and identity verification solutions, we're definitely committed to ensuring that consumers and businesses can be as safe as possible. We have orchestration platforms that let you blend and bring a layered approach to your fraud prevention, that's cross-core. We have core solutions like Precise ID that help verify identities and detect fraud. We have fraud analytics. On top of all that, we've got the people, we've got experts. If you want to do that analysis, you want to take that New Year's resolution and look at your fraud situation that you have right now, we can help you do that. We can run a scan on your portfolio to see where there might be some hidden fraud, maybe synthetic ID that's been laying in wait, that's waiting to bust out this year. So there are great ways that Experian can help, whether it's solutions, people, analytics, data, we're here to help and to partner with folks who want to be able to stop fraud. Wonderful, Kathleen. Thank you so much. Did you have any final thoughts for our consumers, or is there anything that you would like to share that you think would benefit them, other than what you've already shared? There are a lot of new frauds that are happening every day. We've been talking a lot about them on this call. Having that extra vigilance, just taking that little bit of extra caution, like you mentioned with your story, that's me, re-read that email, who did it come from? Does this make sense that I would be getting this kind of a message? Is Amazon asking me to renew something that just doesn't make sense? Take a deep breath, count to 10, ask yourself those questions, and then in the meantime, protect yourself. Check your credit report now and then. Is there anything that looks kind of fishy on there? It's good to see if something is unexpected. Think about some identity protection monitoring. Also, just be aware of scams that are out there. Read the news, understand what's out there, and inform your family. These are all good tips and ones which will help make us more educated consumers and empowered consumers, because there's really a lot of exciting technology that's coming this year, too, and we all want to take advantage of that. Thank you for listening to this episode of Data Talk. As a quick reminder, our show notes and video clips from today's podcast are available on the Experian blog. Just go to Experian.com slash Data Talk, where you can also find the full archive of past shows. Thank you so much for listening. If you enjoyed today's show, please consider sharing with a friend and giving the show a five-star rating. Your vote can give this show more visibility.