CIO Influence Interview with Konstantin Poptodorov, Director, Market Planning, Fraud & Identity, LexisNexis Risk Solutions

Konstantin Poptodorov, Director, Market Planning, Fraud & Identity, LexisNexis Risk Solutions chats about utilizing data and sophisticated analytics to aid decision-making, myths about fraud prevention and more in this Q&A:

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Hi, Konstantin; walk us through your journey and the key experiences that have shaped your role as an IT and SaaS leader.

I have a degree in science, which is all about knowledge, information, problem solving and strategic thinking, so information technology was a natural progression. Business needs change faster than ever; a SaaS model offers the flexibility and agility required to stay ahead of those challenges. My role involves understanding technology and how it can solve the problems our clients are facing, the threat landscape and the complex environment the organisations we partner with operate in, as well as financial and business aspects. So, a little bit of everything.

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Considering the role of LexisNexis Risk Solutions in utilizing data and sophisticated analytics to aid decision-making, can you describe how your specific division contributes to enhancing financial crime compliance and fraud prevention efforts within the company?

I believe that our biggest strengths are the breadth of solutions we offer, going across about fraud and AML solutions as well as our ability to offer both data and software solutions for maximum synergy. Consolidating different data streams and crossover between fraud and financial crime data within our RiskNarrative platform enable organisations to benefit from this enhanced pool of intelligence and make better informed, superior risk decisions.

With extensive experience in the technology industry, can you talk about the major trends in compliance, fraud prevention, and identity verification?

 These will differ by country but what we’re seeing right now is increased focus on financial crime compliance, with unprecedented growth in sanctions due to the current geopolitical conditions as well as areas like trade compliance and business verification as well as increased focus on the transactional space. As payments have become increasingly real time the compliance risk linked to financial transactions has also increased in significance.

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In the fraud prevention space, there is a global focus on the proliferation of scams, and Australia is no exception. This is closely linked to mule activity, which is both significant from fraud as well as financial crime point of view. In this context, there is also a clear convergence trend between fraud and financial crime. While different organizations adopt different strategies, our observations have consistently shown an increased crossover of both areas.

What are the most significant challenges banking and financial institutions face in fraud prevention and identity verification, and how does LexisNexis Risk Solutions address these challenges?

We alluded to this earlier but at this present time scams are the most pressing issue banks must deal with. Not only it is challenging from banks’ point of view, but the additional regulatory pressure makes the task even more difficult by adding urgency and public focus. As fraud evolves rapidly, we can expect the trend to change again soon as new threats emerge, one of which is likely to be coming from generative AI.

How does LexisNexis Risk Solutions leverage technology and analytics to help companies improve their decision-making and outcomes in the context of financial crime compliance and fraud prevention?

We have a large client base across the world and across multiple industries. We have powerful data linking technology, which means we can provide deeper risk knowledge and insights as a result. We utilize this knowledge to develop algorithms and engines dealing with broad and diverse – and often industry-specific – challenges. We know that in analytics outcomes are directly linked to the size and quality of the input, so capabilities like offering a consortium approach across an industry provides clients higher-quality outcomes that enable better decision making; it is all about turning data into actionable insights.

However, data alone is not enough. It is important do deploy the right engines in order to get to the accurate outcomes, which ultimately means that organizations using our solutions will be both effective and efficient in their decision-making process. A good example that comes to mind is our innovative solutions for false positive management in sanctions screening. A final, key aspect is time to decision is another key aspect, organisations increasingly move to real-time decisioning. Investing in locally managed SaaS capacity helps us delivers the required performance and enable timely decision making for our clients.

Can you address some common myths about fraud prevention that you encounter in the industry?

I think most major Australian businesses are well adapted to the changing nature of fraud and have good understanding of the threat landscape and what adequate measures should look like, so we can’t really speak of misconceptions. Where there may be a need for increased awareness is in the smaller organizations.

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One misconception I have come across repeatedly is the belief that fraud risk should be managed at transactions level, as this is where the fraud becomes obvious. This is risky as when it gets to the payment stage it is often too late – fraud controls need to be placed at all stages of the customer journey from new account opening to online banking login to payment, and there should be a feedback loop allowing fraud detection and prevention systems to learn and improve. Only this approach casts the widest net to stop fraud and promote risk mitigation while sustaining a positive customer experience.

In closing, Konstantin, could you share five key principles you’d advise companies to keep in mind when implementing compliance and fraud prevention solutions within their tech stack?

If I can share only a couple of points, the first will be to invest in technology – research we’ve commissioned and carried out by independent organizations has shown that businesses investing in technology have lower overall costs related to financial crime and fraud prevention. The second recommendation I’d make is to invest into flexile technologies that can easily adapt to the changing fraud and financial crime landscape, and can grow, evolve and transform as organizations do too.

Thank you, Konstantin, for sharing your insights with us.

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