Successfully Battling Scams in Estonia and Beyond – Barnabas Ferenczi & Viktor Tkatšenko [Season 3 | Episode #12]

Jens Seidl 00:00:33  Welcome to another episode of The P.I.T. Exchange. I’m very happy to have two guests with me today. And we’re going to talk about scams and fraud. I let Viktor and Barnabas introduce themselves in a few minutes, but as usual, I’d like to start with a few random personal questions to both of them, just to get to know the person Victor and Barnabas first, before we then jump into the work related stuff. So, Barnabas, we’re going to start with you on a flight. Aisle or window?

Barnabas Ferenczi 00:01:06  Aisle. I want to be able to stand up.

Jens Seidl 00:01:09  Viktor.

Viktor Tkatšenko 00:01:10  Yeah. The same. The same.

Jens Seidl 00:01:12  Okay, cool.

Jens Seidl 00:01:14  Next question. Beer. Wine or cocktails? Victor?

Viktor Tkatšenko 00:01:21  Probably beer, but it depends on the meal that I have. So, if it’s a good meal, I prefer to have a wine.

Jens Seidl 00:01:29  Panel, but.

Barnabas Ferenczi 00:01:31  It depends on the on the French wine. So there are wine. Friends and, be friends. No cocktail friends, though.

Viktor Tkatšenko 00:01:40  Not yet.

Jens Seidl 00:01:41  Not yet. Okay. And the last question what is your favorite holiday destination or type of holiday mountain? Sea? Whatever. Barnabas?

Barnabas Ferenczi 00:01:52  Yeah. Last time we were in Greece, in Crete. And I love the combination, actually, of, The sea and the mountains. So you can always have both. Actually.

Viktor Tkatšenko 00:02:03  Yeah, I can relate.

Jens Seidl 00:02:04  I’m going to go there soon. Same. And Viktor.

Viktor Tkatšenko 00:02:07  I wanted to say the same. The the Greece, but not the not the islands, because they are very touristic. but, yeah, I like the Salonica, Kallithea, all this stuff. So Greece is perfect, especially meals and the foodstuff.

Jens Seidl 00:02:24  Very nice. Great. All right. Well, thanks for playing along with that. And with that. Now, let’s do some, introductions. Victor, do you want to introduce yourself first, please? Sure.

Viktor Tkatšenko 00:02:34  So my name is Viktor Tkachenko. I’m from Estonia, and I’m. Today I’m heading, Homeland Security Department at Citadel Bank. So, this is one of the biggest bank in the Baltics. I started to fight against financial crime back in 2010 when I was working for the law enforcement and, subsequently, in eight years. Okay. Probably it’s not very subsequently, but I went to to the banking sector, to Maria, then CIB, and now. Yeah, here at Citadel. And all the time AML was, on my, on my, first page.

Jens Seidl 00:03:20  Okay. All right. Interesting. Thank you. Barnabas, I know your your history, but please share with, our listeners as well, please.

Barnabas Ferenczi 00:03:29  Indeed. So what is my name? I’m heading the European expansion of the financial crime finding, business of, solve.

Barnabas Ferenczi 00:03:40  And this business is located in Estonia. I am located in Munich. So you can see I’m already, working across Europe. And before that, I worked, 14 years at the security technology company John Deere that is known also among central banks for. Currency and digital currency related activities. And before. Before I started my career and worked for more than ten years in a central bank. So I’ve seen also the regulatory side and this is what I really enjoy, kind of connecting the tech, the business and the regulatory, sides in my work.

Jens Seidl 00:04:24  Okay, great. Thank you. Well, we’re going to talk a lot about fraud and scams today. And well, one thing I noticed is that people talk a lot more about scams these days than fraud, and I think that’s for good reason. But rather than me trying to explain that Victor might start with you, if you could tell us a little bit what you’ve seen in this space over the last few years in your country. What has changed?

Viktor Tkatšenko 00:04:51  The change? I mean, the main change is about the expansion of all the fraud, fraud, scams and especially what goes to social engineering.

Viktor Tkatšenko 00:05:03  And because I don’t know, like each and every bank and we are Cittadella, we are doing all of those prevention campaigns related to fraud that don’t listen. Don’t be a person who is participating in a secret police operation where you need to save your funds. but still people, they believe in that. And, when they want to do a transaction at our bank, we are trying to help them to save their funds. But until the end, they still believe that they are saving their funds, and they are believing fraudsters and still doing the payments. nevertheless, that we are saying them that don’t, listen to the third person, don’t do the transaction to the party. You don’t know. But this is the main problem, I think. Because previously. Yeah. If it’s like account takeover, you cannot do anything. if your card is stolen, you can also don’t you can do anything. But in those cases, where it’s about the socialism, engineering or some love scams. People still believe that the person somewhere abroad still need to have a money, I don’t know, to help the pet.

Viktor Tkatšenko 00:06:35  To try to come to you but he or she is not coming. So this is like interesting and especially in the cases, where some very famous person locally is writing to you and saying, we had like last case just recently. Person wrote to our customer and said that, I’m divorcing. Please send me. 30 years. And the person sent it. €30. For what? For the Divorcement? No, it costs much more. But still. And how? The famous person who. You. Who you don’t know is approaching you and asking. Asking for money. So you don’t have, like, any questions in your head. So yeah. This is interesting.

Jens Seidl 00:07:29  Yeah. Very interesting. I’d like to come back to that in a moment and talk a little bit more about that. The change of quality of fraud that we’re seeing, because I think that also has a knock on effect on what can actually be done about that. But before we do that, maybe, Barnabas, from your perspective, what Victor just described.

Jens Seidl 00:07:47  Is that something that you also see on a more regional or global scale even.

Barnabas Ferenczi 00:07:53  Yeah, I love the practitioner’s perspective from from Victor Sanger because he’s been doing this since years in this financial kind of fighting space. And what we see across Europe corresponds to what what you guys see at Citadel. And actually what we also see since especially late last year, that Instant Payments has made the problem much worse because all these, social engineering and scam scenarios, they are now happening. I mean, the payout phase within seconds, irrevocable. And what we also see is that again and again, that instant payment is kind of ramped up faster as an infrastructure in, in most regions across the world and also in Europe, faster than the regulatory infrastructure. So we are still on the basis of, in Europe, the so-called PSD two environment, where there is a lot of focus on how the payer, the sender of the money, should protect himself or herself. The, you know, strong customer authentication and all these things.

Barnabas Ferenczi 00:09:10  So all the responsibility is on that side. And what you describe, Victor, means that actually we are failing to protect the victim against himself or herself, because of course, the person who believes in one of these social engineered stories would want to do the transaction, meaning that all these defenses from the previous regulatory framework are useless. So the regulatory framework is still fighting the war or the last war, and we should be preparing for the next one. What we also see, and I would love to hear your views, Victor here, that the bad guys are kind of networked and multi banked. So they are hitting within a country or also across countries, multiple banks. they are opening accounts and they are doing their money laundering or scam payout activities. And this is what motivates us actually to work with with banks like, like yours to create a network to fight the network.

Jens Seidl 00:10:21  Yeah. Victor, you want to talk to that?

Viktor Tkatšenko 00:10:23  Sure, sure. And the first point, especially this, instant payments that I like the most, this is, this is an issue because nowadays, each and every person.

Viktor Tkatšenko 00:10:38  And I think you guys also, want to have a banking Experience and the services from your sofa. So you are sitting and chilling and you need to have some money and you’re applying for a consumer loan. But on the other hand, the same options are used by the fraudsters. So more you become digital, more you become fancy and flexible. The more fraudsters are using these opportunities on their hand. So we are very digital banks here in Estonia. So you can open an account locally just in a few minutes here. But on the other hand, people. So let’s divide everybody in different segments. First of all, their younger population students who are opening accounts and they think that they work for the company and earning a money for some, for something that is, that is good. But, they don’t understand that they’re giving their account for the fraudsters and become a part of the scheme. The second part comes basically. Yeah. Mule accounts. Yeah. They are purely money mules. Yes, but they don’t understand that.

Viktor Tkatšenko 00:12:09  And, this can become a problem in the future if they want, I don’t know, to become a policeman or or to work for the state or something similar. And then this is like, from 30 to 45 persons. They don’t have a lot of savings because. Because they are, building up their lives. So they are buying everything, all the stuff in the house, and so forth, so, forth. And for children, of course. And, for those or for this segment, fraudsters usually take a consumer loan. So they are, so influencing persons that they should take money to investment somewhere and have a great profit. But from my personal perspective, investments is not so easy. And you can’t get profits from each and every investment you go in. I have losses, to be honest, I losses. But when they see those huge margins, they believe that. And they take a consumer loan for 10%, at least it is locally pan Baltic. and, this is not the highest one.

Viktor Tkatšenko 00:13:38  And they think that for the 10%, they can earn 20%. So this is, This is crazy. And the older population, so, they have already some savings. for the, for their not the children, for the grandchildren and, and for those, and especially what we can see just recently that they are selling their apartments for the fraudsters. So they believe that they are. I don’t know, they are participating in this secret police operation, and they’re saving their apartment by selling it to the third party. this is happening. Yeah. And these instant payments. Yeah. So let’s get let’s get back to this question. And in this, situations with the instant payments of the payment should be done under 10s. And the money is gone. Nobody can retrieve them back. And the victims, when they’re approaching our bank, they’re asking, how can we get money back? And we are telling that. Sorry, guys. We cannot. I don’t know what. I don’t know what will happen with this BSD free.

Viktor Tkatšenko 00:14:57  And when the banks should compensate the money for the victims. I don’t know how it will happen. Probably you will not be able to do anything from the sofa. Sofa anymore. So you need to get into the car, in the bus, in the in the train and go to the branch and to ask for a loan. Not from your sofa anymore. So, this is bad for our customers. but for the. But from another perspective, this is more secure. How it’s done now.

Jens Seidl 00:15:37  Yeah. Well, maybe.

Barnabas Ferenczi 00:15:39  We may need to design, if I may. We may need to design in some friction. That’s one of the the avenues that that will happen to slow down certain processes. And we need to up our differences. That’s the combination probably.

Jens Seidl 00:15:53  Absolutely. But I think what I, where I wanted to get to with this as well is and I’d be really interested in your views. you said it right at the start, Victor, that you’re trying the best you can to tell people this is fishy.

Jens Seidl 00:16:06  Something’s wrong here. You shouldn’t make this transaction, and people are still doing it. So what? I see there’s a lot of discussion at banks, at central banks, how they can help prevent this, this kind of fraud in those scams. But to me, it feels like this needs to start a lot earlier. And there are other parties that need to take probably a lot more interest in how to stop these, these scams. maybe Barnabas, if you want to comment on that first. And Victor, be also keen to hear from you on that.

Barnabas Ferenczi 00:16:40  Yes and no. I would like to say the German of Ein because yes, obviously. So by the time prudence can hit a bank, it’s already too late. It was prepared, especially in the social engineering sense. The victim wants to do the transaction. Convinced? So it’s a bit like, you know, we have now the, the foosball. VM and, it’s like by the time the ball is just, just, before scoring, the team made a lot of mistakes on the other side.

Barnabas Ferenczi 00:17:14  So this is what happens. So telco social media platforms, they all let it pass through. So by the time your, other team is about to score a goal, your whole team kind of was not up to the up to the mark. That’s true. So in this sense, a bit big. Yes. And what I see in Germany where I’m heading the, Bitcoin Digital Association, digital payments working group. And in this capacity I participate in regulatory discussions with the, for example, Bundesbank Food Roundtable that really bring all parties together. So not only banks but also telcos and social media platforms and big search engines and all these guys. However, and this is why I said no, sometimes it’s easier to start with banks because banks is a heavily regulated industry. I mean, Victor could tell, everything about that. And banks are kind of, in the focus of regulation as well. So Victor already mentioned PSV three PSR coming here in Europe, which means they are a good starting point, an effective starting point.

Barnabas Ferenczi 00:18:31  And practically it could be that from that on we add additional stakeholder circles, let’s say telcos or social media platforms. But I think it’s a good starting point with banks.

Jens Seidl 00:18:43  Okay. Interesting picture.

Viktor Tkatšenko 00:18:45  Yeah. And here I like that you Barnabas is here, especially, you’re representing South. So I mean that working in the silos, is not very efficient when the banks are doing, cooperation or collaboration on the level, preventing the fraud or fighting against the fraud. So this is the standpoint here, and I mean that, we have the solve system. we already have it for five years. Okay. We started back in 2021, in Estonia at least. And this is, a cool thing that we have and what we use based on the AML act locally. So this is so the legislation, allows us to do that based on the suspicion in ML, tf sanctions and fraud. We got the message or we are getting a message instantly. So this is like a usual messenger that you use. so so you have different messengers and you know how it works.

Viktor Tkatšenko 00:20:00  So we have the same, but, preventing the fraud at this point. And, so. When we check the latest practice that we have, we were able to save the customers money. Just the recent recent case that we had, it was over than €100,000 for the company because of this system. And it is not only one example for private individuals. Okay. Those, sums probably are not so high, not, hundreds, thousands of euros, but they are smaller. But for the people, they are high and they really appreciate that. And, and. Yeah, from this, from this point it is working. And of course, all the systems, and all other cooperation that we have. So let’s take telecommunication companies. They are also preventing those, clone numbers or fake numbers. Yeah, yeah. That are coming from, from fraudsters and in recent days. So previously EMC asked about like the history, and recent years, how it, developed last year I had, calls from fraudsters.

Viktor Tkatšenko 00:21:28  So let’s say at least once per month. This year I didn’t have any. So probably telecommunication companies that are doing their best to block all of these calls. From the banking perspective, I can see that we are in Estonia. We are blocking more than 50% of the fraudulent transactions. So this is like a huge, huge collaboration and prevention. On the on the yeah fraud scheme or the or all other seen. Yeah that we are doing at the moment. And of course we can do more. We can like update all the systems to the latest versions. But as you know, for the banking it is pretty hard and it costs a lot of money, of course. And the small participants, they can. They cannot afford that. All this, behavioral biometrics to be included in the system. All of those smart scenarios, not only rule based ones. So like but we are trying to do everything to save the customers money. And one more point I want to mention, we have banking association locally in Estonia and we had or we have fraud prevention group working.

Viktor Tkatšenko 00:23:03  So all the banks are working together to think out how the fraud prevention can be more efficient. And we are now, built up a paper, what should be done on each credit institution side to be more effective. So we have a short term, middle term and long term goals to be more efficient.

Jens Seidl 00:23:34  Okay. cool. We’ll come back to, I think Corporation and, Barnabas, you also mentioned the, the roundtable before. So I think it’s, it’s going to be interesting to hear some more about that, but because you mentioned that you’re working with Sal for 4 or 5 years now already. Barnabas, could you tell us a little bit more what your solution actually does and how it works?

Barnabas Ferenczi 00:24:00  Happy to explain, our journey, and we are very proud of the fact that Victor and his team at Citadel were one of the founding partners and members of the network. So what banks, first in Estonia and then in more and more countries realized, indeed, that fraudsters and scammers work in networks. So banks need to work in network even with the best tooling like Victor mentioned.

Barnabas Ferenczi 00:24:26  Even with the most investment you do, if you stay within the bank, you will not see everything that’s happening in fraud and scam. So concretely, the Sav bridge platform provides a secure way of collaboration for the banks. So we give banks a secure channel that enables them to share actionable information. So personal level information, that’s the so-called PII type of information in the GDPR language in an encrypted way. So never ever gets raw personal data shared in any, any way. And that enables banks to do multiple joint actions. And one typical joint action. And this was and still is a major thing. How the Estonian banks use the platform is that they can do a joint investigation so they can clarify. The sender and the receiver bank can clarify a suspicious case. In other cases, they can do a joint screening for example, in a customer onboarding situation. In our language is the KYC or customer due diligence situation. They can screen the customer against an encrypted pool of, let’s say bad or suspicious guys.

Barnabas Ferenczi 00:25:53  But I guess it’s much more interesting if Victor explains, like how concretely your team works today with the platform, because I think that’s the practitioner’s view.

Viktor Tkatšenko 00:26:04  Sure, sure. so, when we have or we, are identifying something suspicious, we’re sending an instant message to the other market participant. So let’s say to the another bank and saying that we have a victim and victims fund funds are not going to your bank. Please check. So and this has gone just in some seconds. And they they know that if it is related to fraud. So this is like a different message. So very urgent fraud. And they are actively working on this one. And this is why we are able to save some funds which are not gone from the customer’s account. We have also another scenario. So if it is related to some money laundering, if we have a suspicion, if it is related to terrorist financing, if it’s related to sanctions, when we are checking, so does the customer have customer of another bank has the same date of the birth.

Viktor Tkatšenko 00:27:21  Then the person in the sanction list and vice versa. Just yesterday, in the week, in the evening, we got a message from another bank that, In our Citadel bank there is a money mule who is, getting funds from their customer who is a victim and sending them abroad. So, and we were able to save from 10,000, €3,000 because 7000 was already gone. But at least it’s not zero in the end. Yeah. So this is 30% of saved money. So this is how it works in real life. Of course we want to build out, to build up, and we are in the process that the system could be automatically working on these fraud scenarios that the system will be blocking by itself. Now, all of these fraudulent transactions and but this is pretty hard because all the banks they have different monetary system, especially on the online monitoring part. And this implementation is hard. We are trying to do that and hopefully, hopefully we will succeed.

Jens Seidl 00:28:42  Yeah. Well that sounds like a really interesting next step.

Jens Seidl 00:28:44  But maybe looking back into the past, you just described a lot of the things that the system now does for you. What were you actually able to do before that? Was that just impossible to do any of that, or was it a matter of a lot of people having to pick up phones and talk to each other? How did you deal with this before the technology?

Viktor Tkatšenko 00:29:04  This is a really good question. but I think I think, the fraud wasn’t the main issue. yeah. So, people They didn’t have a lot of calls and they didn’t have the social engineering scams like anything. And when it became to be, very spread across not only the Baltics, across the whole Europe and the third countries also, and then the providers started, to become more efficient. To build up all of those scenarios. we are also trying to get in some point, but we are still behind the fraudsters. They are using new technology and now nowadays they’re using AI. all of those deepfakes, you know, the latest probably, you know, the latest deepfake.

Viktor Tkatšenko 00:30:02  Okay. It’s not the latest, but it was two years ago, related to, Brad Pitt. where the fraudsters was able to, to gain. I don’t know how. More than 400,000, probably. Or something like that. Yeah. Wow. He was pretending to be a Brad Pitt. So he was at the hospital. He was somewhere else. And asking the money and the person, a victim, I mean. Yeah, and she she she thought that. Yeah. This is a real. Brad Pitt because, he was doing this. Those video calls. Yeah. So, yeah, but those days, I don’t think that the fraudsters, they had this opportunity to be so efficient to, to gain those money, but nowadays. Yeah. And, what we can see on the local market that, they’re trying to get also modern language speakers from each and every country to, yeah, again, to be more efficient in the fraudulent schemes. Yeah, because now this is like a big theater, the big movie where one is calling from the social department of the state authority and saying that your pension, I don’t know, is blocked or stuck somewhere.

Viktor Tkatšenko 00:31:28  And when the person believes, okay, okay, what should I do? wait a bit. Now, the person from the bank will be calling. So the person from the bank is calling from the security department saying, yeah, your, money is not safe. so please wait. Now, the guy from the police department will call you, and the guy from the police department is calling. So it has a logo on the back side, like the Estonian police. Really? And he’s showing his badge like his policeman. Everybody believes. And now. And we we had one case that the person was under the influence of the fraudsters for three months. It’s not a day. Three months.

Jens Seidl 00:32:17  Yeah, that’s fascinating to hear these these real life examples.

Barnabas Ferenczi 00:32:21  Absolutely. And Victor, what you describe is that by the time the current very modern manipulative scam scenarios came, the Estonian banks had already running collaboration on the secure channel. So you guys were kind of as prepared as you could be. What we see in other markets, because we are talking to banks and bank associations and central banks in in other countries as well.

Barnabas Ferenczi 00:32:50  In Central Europe, for example, is that they are now being hit by this wave of food and scam and by also the political attention to that due to the media reporting and everything. And now they are looking at okay. Banks already have to talk to each other. So the practitioners today in those countries, they call each other. They send Excel files. They send emails. They send Swift messages, which is either absolutely not compliant with any any legal frameworks and or very slow and very much person dependent. And this is exactly what Now other bank associations and bank consortia realize in other countries, is that okay? They have to move on to a structured and fast way of collaboration, following the example of Estonia and Latvia. And I cannot yet name those next countries, but we are going to go live in a central European country soon, where exactly this tension between we need to talk to each other, but we cannot do it without a secure platform. This is what gave the motivation to to embark on the same journey that Citadel and other banks did already five years ago.

Jens Seidl 00:34:15  Absolutely. And Victor, if I remember correctly, you said before that you can now stop around 50% of the fraud attacks. Is that right?

Viktor Tkatšenko 00:34:22  More than 50?

Jens Seidl 00:34:23  Yeah, more than 50. And how does that compare to these other countries that you’re looking at at the moment?

Barnabas Ferenczi 00:34:31  Well, it’s much lower. And of course, the trouble is that even the statistic is not, reliable because there is different sources how to measure what is hundred percent. So what the bank see what the police would see and what consumers report in consumer surveys. And usually the last source would give you a much higher percentage. What we concretely see is that, in the user community of, of our platform, we have a very significant increase of this, fraud loss recovery rate, in some cases from 10% to 50 or higher percent. In other countries, banks report way below 10% as a starting point. And What also troubles banks is, the overload, the workload and most of the money laundering and, and fraud related work is what we call false positives or false alarms.

Barnabas Ferenczi 00:35:34  And that makes the job of practitioners very tough, because you have to fish out the real signals from the noise. And working with the, a collaborative platform at actionable level with the with the personal information, in the background enables you also to kind of focus on the real cases and not being overloaded by, by a lot of things that are not Actually fraud or scam or money laundering?

Jens Seidl 00:36:08  Absolutely. well, I’d like to, I’m conscious of time. I’d like to move on to talk a little bit about what you think may come next. because again, we see, so rapid technology, enhancements now. And the technology we talked about AI already is developing so quickly. I remember video deepfakes. You mentioned that that maybe it was like three years ago where there was this infamous video clip of, Will Smith eating spaghetti, and it looked horrendous, right? And now it’s perfect that that only took a couple of years to fix it. there’s a guy on on the horizon. Are the fraudsters going to use now, even agents to broaden their bandwidth that way and move scams along quicker and on a much broader scale? And quantum computing is.

Jens Seidl 00:36:59  And the next thing that’s going to hit from somewhere 2030 onwards I guess so. What’s your outlook on these trends and how do you think that’s going to impact what what you do? And Victor, maybe if I can start with you.

Viktor Tkatšenko 00:37:12  The main is of course, those deepfakes based on AI. But another thing that fraudsters can use with the AI are those agents or bots who are communicating with the victims. And, I think in 2030, fraudsters don’t need to have those huge call centers for each and every country with different languages. They just need to have an AI bot who will be covering everything. It will be calling, it will be chatting. It will do everything to stall the money from the victim. Unfortunately, I think it is a feature.

Jens Seidl 00:37:59  Yeah. Okay, let’s see. The ultimate Turing test. It’s and it’s going to pass. I think you’re right about that.

Barnabas Ferenczi 00:38:07  We say on the on the fin crime fighting industry side. The good news is that automation and AI is also helping.

Barnabas Ferenczi 00:38:16  So like Victor said earlier, one of the next steps could be should be to speed up the process with more automation. And that’s possible within banks with the APIs, application programming interfaces. That is in the normal IT tooling today is just many banks. They have such a resource issue, especially in it, that it takes time until, for example, the the code team gets this on the priority, but the technology is already there and very likely the next level will be. Not only that, hostiles use more and more AI, but that for teams can also, speed up their work and ease their work with AI. So what we see as the next step is that some of the routine steps, let’s say, creating an official report for law enforcement, the so-called suspicious activity reporting, and these kind of things can be eased and automated with, AI and also the evaluation of signals about for those money laundering activities could be automated in most cases. And what we believe in is that this is more effective at the network level.

Barnabas Ferenczi 00:39:37  So not each bank applies the best AI tooling in the future. Like Victor mentioned, this will cost a lot of money that especially smaller institutions and payment service providers will have an issue with, but that you apply this AI, next level at a network level, then your investment will be much more effective.

Jens Seidl 00:40:01  Absolutely. And I guess on that network level, you really need AI to do that as well, because the, the the amount of data that you’re looking at, no human brain can actually process that, right. You need that that processing power.

Barnabas Ferenczi 00:40:16  Absolutely. And and also you need a network that is designed to have the practitioners. So for example, in our case we are not sharing and overloading vectors, colleagues and other banking people with zillions of information and data points. Like Victor mentioned, is always related to a concrete suspicious case. And the data volume is optimized for that type of case. And this is where then with AI, you can be much faster and you can have in the routine cases, the decisions than maybe even without, a human in the, in the first case.

Barnabas Ferenczi 00:40:58  So like Viktor said, the platform itself is work in milliseconds. But then if you need a human, of course, who is overloaded, then it slows down the actual, for example, case investigation. In this setup with AI, probably the second problem could be solved, at least for some of the cases within cases.

Jens Seidl 00:41:21  Absolutely. All right. Well maybe then to to wrap up today’s episode. Barnabas here, a lot of optimism in what you say, actually, maybe do you want to just share your views on what’s what’s what’s the future now, in in this space, how do you look forward to to what’s going to happen next? what are the things that make you optimistic? What are the things that you worry about?

Barnabas Ferenczi 00:41:50  Well, I’m a fan of your podcast. Yes. And sometimes you ask the people like what they are enjoying as books. And I’m sitting in my room now with full of books. So one of the books that came to my my view is Robert Manas, who was writing about the European integration project, but in a, in a fiction way.

Barnabas Ferenczi 00:42:11  And that’s exactly what makes me also optimistic that Europe is getting their act together. Now, within countries where banks get together to fight fraud in a collaborative and actionable operational way. And this is happening also across Europe. So we are ourselves connecting banks across countries like Citadel is also a boutique banking group, and the same is happening in Central Europe soon. And there is also initiatives to interface this national, collaborative approaches to create, let’s say, a European landscape of interconnected fraud fighting. So that makes me kind of positive about that. We are going to deliver a good fight against financial crime.

Jens Seidl 00:43:00  Excellent. Thank you. Victor, same question to you.

Viktor Tkatšenko 00:43:04  Yes. So, we have, positive and negative sides. So, about the negative. I already told that, fraudsters will be using more of this EA, but the positive is that the banks are also using AI. And just a recent case, it was today when we were checking one document that was presented by the victim again. he is still believing that he is investing in somewhere and in some.

Viktor Tkatšenko 00:43:37  Yeah, good font that is producing a lot of profit. And it was fake. And our AI told that this was created by AI and this is fake. So, it is used in both ways, and we will be using that more and more. And it is already included in our monitoring scenarios. So, where is not only AI but also machine learning, which is reducing the amount of false positive alerts. So our people and overall, people who are working in AML, in fraud prevention, they need to have more expertise because more and more alerts are the cases they will handle. They will be more complex because the AI and machine learning will be doing, the first part of the investigation and sending all the suspicious cases to the experts where the expert should put an expert opinion in the end. So we need to have more persons, more clever persons, more educated and more professional persons in this field to be more efficient, to fight against the fraud.

Jens Seidl 00:44:59  Yeah. And and I think what we haven’t really said specifically is we’re not dealing typically with the teenager in their bedroom trying something on.

Jens Seidl 00:45:08  Right. This is an organized crime. These you mentioned the the big office buildings filled with scammers and fraudsters that these are, well, companies in a way that invest heavily in these arms race as well. So we need to make at least the same level of investment to keep fighting back and and winning that arms race basically.

Viktor Tkatšenko 00:45:31  Even more, even more.

Barnabas Ferenczi 00:45:33  Absolutely. And in a, in a collective intelligence way.

Jens Seidl 00:45:37  Yeah, yeah. Great. Well, before I wrap up, just one more thing. we are recording this episode a couple of days after the Ebor Day in Copenhagen wrapped. And. Barnabas, Congratulations. Your company won the Fintech award at this event. So well done.

Barnabas Ferenczi 00:45:56  Well thank you. And it’s a really inspiring recognition from this prestigious banking group, the Euro Banking Association and and the EBA days. So it gives us a lot of motivation to continue our work with Victor, his team and others across Europe.

Jens Seidl 00:46:13  Onwards. Great. Well, thank you both so much for joining this this episode.

Jens Seidl 00:46:17  The time has just flown by. I can’t believe it. It was very interesting conversation. Thank you so much. and. Yeah, hopefully. See you soon. Somewhere, in wherever it may be.