How Fraud Will Be Fought in the Metaverse

Over the last month, virtually all of the world's tech giants from Facebook and Microsoft, to Tencent and even Yandex have made announcements about new features that will bring their companies further into the metaverse. This will be the next generation of the internet, where our offline lives will become more and more intertwined with our online ones through 3D representations, immersive digital environments, and graphically enhanced social networking.

The way we will interact with this new reality will be broader than we can imagine. It won't just be about our phone and our computer, but about new interfaces we can hardly yet envision. These will include smart glasses that will present us with an augmented reality - designed to inform and to entertain - that will pop up in our everyday lives. Other wearable technology will go everywhere with us, collecting data, but also giving us the ability to do things that today would seem like science fiction.

In this new metaverse, we are told, we will soon be doing most of the same things we do today, whether it will be online or offline. Gaming is one of the first things that will move into this new world (actually, with Decentraland and The Sandbox, it already has), and other forms of entertainment will soon follow. Simultaneously, we'll see the arrival of e-commerce. With time, there will come along regulated industries, and even medicine, where you will interact with healthcare professionals in virtual environments.

On the one hand, this all sounds fantastic. It's exactly the kind of virtual wonderland we've been waiting for since the popularization of the AR/VR concept. On the other hand, it raises certain problems. Chief of these are those issues relating to fraud: In a virtual world where everyone is hidden behind a digital mask, how can you tell who's who?

When payments are being made for virtual land or for concert tickets, how are we going to be able to make sure the receiver is the person who paid for them? With so much identity data being collected in the metaverse, how are we going to be able to tell what's right and what's wrong? Certainly, fraud prevention schemas that are in place today won't be up to the task.

Identity Fraud: The Internet's Oldest Nemesis

For as long as there has been the internet, finding ways to establish network participants' identities and eliminate fraud has been one of the most active areas of innovation. The early days of the World Wide Web, when networks were small and people were ready to share their real names and addresses via email when carrying out transactions, lasted only a short time. By 1995, sites like eBay were fulfilling a need not just by listing items up for sale, but taking on the risk of the item people paid for never actually making it to its final destination.

Of course, risk didn't need to stay with the platforms for long, and soon there arose insurance companies that issued policies for individual purchases. Some people reading this article might be old enough to remember having the option to pay to insure a purchase when buying something on online auction sites and early e-commerce marketplaces.

Fintech, eventually, presented itself as the guardians against risk of fraud online. Today, payment processors like Stripe, PayPal, and Dwolla have taken on the responsibility of verifying the identities of those who send payments and those who receive them online. Banks and credit card companies participate too, with all these companies working together to collect identity documents from users, verify them, then authenticate payments through things like 2-factor authentication.

In the metaverse, however, the identity checks that have been put in place over the last decade in order to reduce fraud may just not be enough. By entering this virtual world, we're going to be moving into a reality that includes much more of ourselves than just our payments.

Telemedicine, for example, is very likely to become the dominant way we interact with our health care providers. We will attend classes in digital classrooms and we will need to prove that it's really us taking the tests - not a stand-in - in order to receive university credit. Technology is well on its way to enabling people to mask their appearances and voices with hyper-realistics skins and computer generated audio. People, in general, will want to know that the individuals they are interacting with are who they say they are.

AI, Deep Learning, and Advanced Neural Networks

The main difference between fraud prevention in the Internet of today and that of in the metaverse of tomorrow is the vast amount of data that needs to be analyzed. Interactions in the virtual worlds that will soon be our home will occur at literally every step. Technology will need to be implemented that can manage all of this data analysis.

Of course, the number of files that needs to be analyzed at the current moment is far larger than anything that could have been imagined only ten to fifteen years ago. For this reason, each time you open a bank account or apply for a loan online, the photo you are asked to send of your passport or driver's license is analyzed using artificial intelligence. Sometimes, regulated platforms today may ask for you to take a selfie to compare to your document - AI is used here too. Some companies have even figured out how to verify who you are by analyzing video clips. Interestingly, this technology is even being used to carry out job interviews!

In the metaverse, these technologies will have to be improved upon, fast. Not only will the algorithms need to get better through machine learning, but technologies will need to be developed that can apply things like audio, textual, and behavioral analysis to everything we write, say, and do - in real time. This will take a kind of efficiency in computing that has yet to ever be achieved, and will likely lead to progress with neural networks that has barely ever even been theorized.

Improving on the AI/ML of Today

How long it will be until we get a true 'metaverse' of the kind promised to us by Zuckerberg and the like is still up for discussion. Ultimately, a whole host of technological and ethical problems need to be resolved before we can really move into our future digital homes. Much of the digital transformation of tomorrow is possible today — we would be happy to show you how.

Before you go

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