Identity fraud is a growing problem. The Central Identity Fraud Hotline registered a doubling in reports in 2018 compared to 2017. Data leaks facilitate fraud and criminals are given new channels to infiltrate through online and mobile banking. So it is alarming that financial institutions still rely on outdated identity verification methods.
How do we provide an answer to identity fraud?
The mobile platform has become a popular target for hackers. Today’s cyber criminals are undeniably well-organized and sophisticated. They switch quickly and take advantage of vulnerabilities and vulnerabilities in mobile operating systems. Digital banking and payment are also becoming increasingly popular, and that encourages fraud. The faster the payments are, the faster are the fraud.
To grab
In addition, data breaches throw enormous amounts of personal information on the Internet, and that is a major contributor to the growth of identity fraud. Last year, the American hotel chain Marriott announced one of the largest hacks in the world. Criminals had stolen a database containing the personal details of more than five hundred million guests. Addresses, passport numbers and even credit card numbers of some customers were thrown on the street. By cross-checking the data of these types of leaks with the data of other hacks, criminals can easily commit Account Takeover Fraud and New Account Fraud. This is where identity verification is important.
- While it is getting easier for criminals to carry out their practices, banks and financial institutions are getting harder and harder because of identity fraud. They relied for too long on outdated methods of verifying someone’s identity, such as manual checks or static data from credit insurers. That is not without danger. If that data is stolen, fraudsters can easily break into existing accounts or log in with a fake account. In the infamous Equifax breach, we saw criminals publishing the social security numbers, dates of birth and addresses of more than 143 million people. If that data is freely available, it is no longer possible to check what it is used for. Now that the banks are increasingly on the digital path,it becomes more important and more difficult to verify identities correctly and quickly.
- Criminals have a wealth of personal data at their disposal to target weak identity verification processes. And while they can’t control data breaches, banks need to realize that they can no longer rely on static username and password authentication methods.
Modern jacket
The consequences of identity fraud must make banks and financial institutions understand that their processes for verifying the identity of users are no longer sufficient. But what should they do? And where do they start?
The combination of traditional identity verification methods with advanced risk analysis, supported by artificial intelligence and machine learning, can build a context around an identity. This involves a lot of checks, such as account checking in real time, viewing the identity documents, biometric verification for example via a selfie that matches the identity document and geolocation of the device.
Conclusion
This approach allows companies to view and analyze multiple pieces of information from different sources through various channels, such as online, through a mobile platform, or a combination of the two. In this way they can make decisions based on the fraud risks linked to the new customer. The chance of fraud when opening a new account is therefore also smaller
