Tatiana Sharposhnikova, CEO of RSL LAW, said it is now “easier than ever for individuals to exploit weaknesses in the chain by using falsified identity documents and bank statements”.
Rob Woods, fraud and identity expert at LexisNexis Risk Solutions, said mortgage companies “need to fight fire with fire”, investing in cutting-edge technology and staying constantly alert.
The danger of AI documents
Experts said AI-falsified documents are now so convincing that it would be easy for a lender or broker to be duped into approving a loan using a fake ID.
John Everest, director of mortgage services at Everest Mortgage Services Ltd, said: “AI-generated and altered documents are now far more convincing than they used to be, so the risk to lenders and brokers is much higher than before AI came along.”
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Sharposhnikova said standard checks are no longer enough.
She added: “The property industry as a whole must become more aware of the major risks that AI-generated documents pose to compliance.
“Conveyancers in particular have a crucial role in distinguishing between genuine and bogus documents.”
How verification is evolving
Simply checking documents by eye no longer works, added Woods.
He continued: “There are over 300 elements on a physical identity document that need assessing to determine whether it is fake or has been tampered with.
“The human eye cannot determine the validity of a document as easily anymore.”
But he added that while some sectors and organisations have already employed sophisticated data and AI-powered systems – something that is particularly clear in banking – other sectors have not.
He warned: “Even some large, well-established organisations still rely largely on manual processes and human checks to review and verify identity documents.
“This is gradually changing, but not quickly enough.”
A layered approach
Mortgage brokers said they are taking a layered approach to ensuring documents are correct. Rachel Kielty, head of case management at Mojo Mortgages, said her firm’s approach involves standardised digital checks on document properties combined with specialised training in spotting sophisticated AI-driven alterations.
“When a document requires deeper scrutiny, we escalate the file to our risk and compliance team for enhanced due diligence (EDD). These EDD protocols utilise advanced AI-detection tools that analyse microscopic patterns and metadata, ensuring a level of oversight that manual review alone cannot achieve,” she added.
Meanwhile, Sharposhnikova said the team is constantly “researching, identifying and implementing additional tools and approaches to confirm the validity of documents and ensure we can rely on them”.
But the firm is taking other steps too, deliberately requesting a large number of documents for cross-checking purposes.
“By deliberately requesting an exhaustive range of verified source-of-funds documentation rather than piecemeal bank statements, we can build a complete picture and spot inconsistencies that might otherwise pass unnoticed,” she added.
Everest agreed that building a complete picture is vital.
He said: “From my side, I do not rely on one document alone.
“I cross-check everything for consistency in income – bank statements, credit profile, ID and deposit evidence – and if anything does not stack up, I ask more questions and request further proof before a case is submitted.
“For me, it is about making sure the case is fully evidenced and stands up properly from the start.”
Mark Harris, chief executive of SPF Private Clients, said technology can help too.
He said: “Adoption of tools such as Sikoia, which offers to streamline and automate a key part of the client onboarding and verification process (among other things, it offers income and employer verification solutions) is growing through the industry.
“Also, ‘Resistant AI’, which detects fake or fraudulent and AI-generated PDFs/images and documents, could become a useful tool for brokers.”
Agility and relationships are key
As AI becomes ever more adept, companies must constantly adapt, according to experts. Kielty said the future of ID verification lies in “dynamic monitoring, moving beyond point-in-time checks to a system where verification standards are constantly assessed and updated against the latest global fraud intelligence.”
She warned: “Staying stagnant isn’t an option. Agility is now a core component of compliance.”
Meanwhile, Sharposhnikova said it is still possible to fight AI with a human touch.
She added: “Above all else, the rise of AI proves how much client relationships matter.
“Truly getting to know your client is immeasurably useful – and being able to simply pick up the phone to ask them directly about inconsistencies goes a long way. Nine times out of 10, they are able to provide a clear explanation and are cooperative in resolving issues.”
