How Bank-based Digital ID can Neutralise the Threat of Deepfake Fraud

Guest blog from Nick Burt at OneID as part of our #UnlockingDigitalID campaign week 2024.

As our digital touchpoints increase—from shopping to social, entertainment to education, professional to public services, and much more—we are leaving a data trail for fraudsters to use our personal data and create deepfakes.

Fraudsters have become adept at using AI to create convincing synthetic identities, complicating distinguishing between real people and bad actors. A study by Santander found that 54% of Brits are worried about deepfakes being used to steal money, while 78% believe this technology will become a standard tool for fraudsters. As digital fraud evolves, we need smarter, more robust solutions.

A digital age needs a truly digital ID, not a digitised ID.

Digital identity verification is not just about scanning documents. It leverages data from trusted sources, such as banks, to ensure a person is who they claim to be. Bank-based digital ID verification is a prime example. With up-to-date Know Your Customer (KYC) data, banks hold a wealth of accurate and vetted information that can be used for secure identity verification. This document-free process delivers identity checks that are seamless, secure, and reliable—fighting fraud in real time. That’s why NatWest uses OneID – the UK’s only bank ID service – to verify the signers in its Nordic leasing business.

In our recent webinar, How can the UK accelerate digital ID to tackle deepfakes and fraud?, Martin Sansone, Lead Standards Architect, Pay.UK said, “Fraud is rampant, and digital identity is the panacea. With a KYC account from the bank, the trust level is high, which ensures a safe transaction environment.”

One digital ID tackling many forms of fraud.

Fraudsters target every corner of the digital economy, from payments to direct debits and lending applications. Here’s how a truly digital identity can prevent fraud in different forms and stages:

Ongoing KYC and AML Checks:
Traditional ID verification relies on document checks, which are a point-in-time record of a person. This might not be enough for products and services that require stronger KYC and AML checks.

On the other hand, banks continuously run KYC and Anti-Money Laundering (AML) checks on their account holders, monitoring for suspicious behaviour and compromised accounts. This can give businesses the fraud indicator data needed to create risk profiles for their customers.

Sergei Fedorov, Head of Onboarding for Anna Money, a financial services company that has integrated OneID® into its KYC process, lauds bank ID’s ability to deliver a seamless flow of identity verification, simplifying customer onboarding while ensuring compliance with AML regulations.

Authorised Push Payment (APP) Fraud:
APP fraud happens when someone is tricked into sending money to a fraudster posing as a legitimate recipient. The Payment Systems Regulator’s (PSR) new reimbursement requirements mandate the sending bank to reimburse the victim of the fraud up to 100% of their loss – increasing the cost of fraud to the industry by 66%. The sending bank then needs to claim 50% of the fraud cost from the receiving bank.

Digital identity can create “good friction” by verifying payees before sending money. Europe has had great success with bank ID services like itsme®. The company’s CEO Stephanie De Bruyne shared, ‘Through itsme, Belgium managed to reduce cybercrime losses by 26%.’ Around 80% of the population in Belgium use itsme, which is driven by banks, telcos and the government together.

Direct Debit and Credit Fraud:
In many cases, the account number and sort code can be manually entered when setting up direct debit mandates and don’t require signature verification. This makes it easy for fraudsters to use stolen account details to set up unauthorised direct debits – defrauding individuals and opening the business to indemnity claims.

The same could happen when benefits are claimed in someone else's name. Fraudsters could rob beneficiaries and local authorities or businesses by entering their bank account details and claiming benefits that are not theirs.

However, a bank-based digital ID can solve these problems by auto-populating the form with verified information. In fact, OneID® recently enabled a farming charity to verify its members and their account details as part of a grant application process. All that the members had to do was use OneID® to verify themselves. In just seconds, they had their verified details entered automatically – ensuring the grant went to the right individuals.

Lending Applications and Affordability Checks:
Most unsecured loan applications require manual data entry, which opens the door to misrepresentation. When individuals struggle financially, they may exaggerate their income or understate their expenses, creating an inaccurate picture of what they can afford. 35% of UK lenders have reported increased document tampering during loan applications. This puts the borrower’s financial security at risk, results in financial losses for lenders, and slows the decision-making process.

Lenders can streamline the entire process by using open banking-based solutions. These solutions provide real-time, accurate insights into an applicant’s financial situation, making lending decisions fast, accurate, inclusive, and reliable (FAIR).

The Future of Fraud Prevention

Fraud isn’t just a business problem; it’s a societal one. The digital world demands better safeguards, and digital IDs offer the next step forward. With the right tools, businesses can fight fraud more effectively while creating a seamless customer experience.

Solutions like OneID® use bank-verified data to simplify verification processes, prevent fraud, and build trust in an increasingly digital world.

David Birch put it best: “You can’t fight AI with AI. Sooner or later, you have to have a digital identity. Fraud is a big problem, and the complexity of threats will only increase.”

Whether it’s ensuring secure payments, preventing identity theft, or making lending processes more transparent, digital identity anchored in trusted sources will be a critical tool for businesses and individuals. Today, banks are among the most trusted institutions in terms of their due diligence and safeguarding measures.

By leveraging solutions like OneID®, businesses can protect themselves from fraud and enhance their customers' experience—making the digital world safer, faster, and more secure.

Learn more about OneID.

Welcome to techUK’s 2024 Digital ID Campaign Week! On the 14-18^th Oct, we are excited to explore how our members are increasing efficiency for both businesses and users, combatting fraud, as well as what creative and innovative ways our members are expanding our understanding of Digital Identities.

Whether it’s how we’re communicating, shopping, managing our finances, dating, accessing healthcare or public services, the ability to verify identity has quickly become a critical vanguard to the Digital Economy.