Preventing Digital Fraud with Katarina Pranjić from LexisNexis Risk Solutions |🎙️#55
Fraud, scamming, identity theft and synthetic identities: this time on DevOps Accents Leo and Pablo talk these big topics with Katarina Pranjić from LexisNexis Risk Solutions. In this episode:
- How digital revolution reshaped the fraud landscape;
- How to fight fake identities created with AI?
- How does a company fight against targeted AI attacks?
- What are synthetic identities?
- How data monitoring helps to fight back?
You can listen to episode 55 of DevOps Accents on Spotify, or right now:
DISCLAIMER: The information provided in this podcast is for informational purposes only and is not intended to and shall not be used as legal advice. The views and opinions expressed in this episode are solely those of the speaker/s and do not necessarily reflect the views or positions of LexisNexis Risk Solutions.
LexisNexis Risk Solutions does not warrant that the information provided in this podcast is accurate or error-free.
The Digital Revolution and the Evolving Fraud Landscape
Fraud has existed for centuries, but the digital revolution has transformed the way criminals operate, making fraud more sophisticated, scalable, and harder to detect. In a discussion with Katarina Pranić, Head of Regulations and Policy in Economic Crime at LexisNexis Risk Solutions, she explored the complexities of financial fraud, synthetic identities, and how AI is both a weapon and a defense in the fight against digital crime.
Fraud is a very, very specific topic because it has evolved over the last decade, I think—even more—but I'm observing the last decade because, to me, it's fascinating what has been happening. Currently, in the UK, fraud accounts for 40% of all crime. That is a shocking stat for me. It’s something that shows it’s not only a burning issue but also— and we'll talk about this a little bit later, I guess—about regulation and how governments are addressing this problem. But what has also evolved is that fraud no longer targets just elderly people or those who are not tech-savvy. These days, anybody can be a victim. — Katarina Pranjić
The Rise of Synthetic Identities and AI-Powered Fraud
The traditional perception of fraud often involves identity theft—stealing personal data to impersonate someone else. However, the rise of synthetic identities has changed the game. Instead of stealing an entire identity, criminals now create new ones using a mix of real and fabricated information, forming what Katarina calls “Frankenstein identities.” These synthetic identities build up credit over time, making them difficult to detect until a major financial crime is committed.
The problem is growing at an alarming rate. Between 2020 and 2023, suspected synthetic identities in the UK alone increased by over 500%. Because there is no real victim to report these fraudulent identities, financial institutions are often unaware of the crime until it’s too late.
Adding to the challenge, criminals are leveraging AI to refine their attacks. AI models can now analyze banking security measures and identify loopholes, enabling fraudsters to bypass detection. AI-powered deepfake technology allows criminals to mimic real voices and faces, making scams more convincing than ever.
Fighting Back: AI, Data Sharing, and Security Measures
To combat AI-powered fraud, companies and financial institutions must adopt AI-driven solutions themselves. Fraud detection now involves behavioral biometrics, transaction monitoring, and real-time risk assessments. For example, banks can detect anomalies in spending patterns, locations, and transaction behaviors.
A key defense mechanism is data sharing across industries. By pooling transaction data and fraud reports, companies can detect fraud trends in real time. Katarina highlighted that, in 2023 alone, over 109 billion transactions were analyzed to identify fraud patterns. However, this raises questions about data privacy and regulatory compliance.
The Economic Crime and Corporate Transparency Act in the UK and Article 75 of the AML Regulation in the EU have been introduced to balance fraud prevention with data privacy laws like GDPR. These initiatives allow financial institutions to share critical fraud data while ensuring compliance with strict privacy guidelines.
I think there are two major things that we need to address here. One is the responsibility of the companies that handle our personal data—to do better in protecting it from fraud and to provide better channels to support us if we suspect we are becoming victims of fraud.
The other is us. I think, as a society, we don’t place enough attention or emphasis on financial literacy and the dangers of cybersecurity attacks. These are areas where we need to build awareness and education—not just in general but also to teach people when, how, and for what their personal data is used in certain cases. Without that information, you can’t fight back. You need to have something to work with. — Katarina Pranjić
Can We Trust Governments With More Control?
A major concern surrounding fraud prevention is whether governments and corporations can be trusted with the control required to fight back. The rise of central bank digital currencies (CBDCs), such as the proposed digital euro, has sparked debates about financial surveillance. While governments argue that digital currencies can help prevent fraud and money laundering, critics fear that excessive monitoring could lead to overreach and loss of financial privacy.
Pablo, one of the hosts, voiced concerns that government regulations often serve as a means to ensure tax collection rather than purely protecting citizens. He questioned whether greater financial transparency could lead to undue control over individuals’ spending habits.
Katarina countered by emphasizing the difference between monitoring and control. Financial institutions are not tracking individual behavior to exercise control but to detect anomalies that could indicate fraud. She shared a personal example where her bank successfully blocked fraudulent transactions in Texas and China based on her typical spending behavior. Without such monitoring, customers would be far more vulnerable to fraud.
I wouldn’t use the word control here. Monitoring in this space is crucial. If you’re not monitoring the information and data you hold, you’re exposing yourself to numerous threats. And the only way to deal with that is by having good insights.
This isn’t about finding out information about Pablo or Katarina—it’s about identifying the bad players in the market, who will stand out because their behavior is very different from ours. And sometimes, it’s not very different; sometimes, it’s similar, and we need to be able to identify that.
So, I don’t think anyone is controlling me if they are looking into my behavior—I expect them to do that so they can protect me. Otherwise, they wouldn’t know what’s usual and what’s unusual, what’s suspicious. — Katarina Pranjić
What Can Individuals and Businesses Do?
As fraud evolves, so too must our defenses. Katarina shared practical advice for individuals and businesses to protect themselves.
For individuals:
- Be cautious with personal data – Fraudsters use publicly available information to create synthetic identities.
- Use a family “passcode” – If someone calls claiming to be a loved one in distress, verify their identity with a secret word.
- Monitor accounts regularly – Unusual transactions, even small ones, can indicate fraud.
For businesses:
- Implement AI-driven fraud detection – AI can detect suspicious behaviors faster than human analysts.
- Engage in data-sharing initiatives – Secure data exchange between institutions can help detect fraud patterns.
- Educate employees and customers – Awareness is key to preventing scams and improving cybersecurity.
The Future of Fraud Prevention
The fight against fraud is a continuous game of cat and mouse. As AI enables criminals to commit fraud at unprecedented scales, companies and governments must respond with advanced security measures, AI-powered detection, and collaborative efforts. While concerns over financial privacy and government control are valid, refusing to monitor transactions is not an option. The challenge lies in finding the right balance between security and individual freedoms.
In the coming years, digital identity verification, blockchain-based authentication, and AI-driven fraud prevention will shape the next era of financial security. The question remains: how can we leverage technology for protection without compromising privacy?
The solution lies in effective and organized data management, with a focus on prioritizing user interests. At mkdev, we assist clients in managing their data and ensuring its protection and optimized access. Contact us to evaluate your current data protection measures.
We are covering the entire scope of data governance and protection, as well as regulations compliance. Schedule a call
Show Notes
- Our guest, Katarina Pranjić, on LinkedIn.
- Her company, LexisNexis Risk Solutions.
Podcast editing: Mila Jones, milajonesproduction@gmail.com