The sharp uptick in fraud that coincided with the digital evolution made it clear that banks, credit unions, and fintechs need to invest in a strategy that utilizes identity layers to keep their customers and their finances safe.
The steady rise in fraud over the last several years spiked—payment fraud rose 70% last year and is expected to increase by 95% in 2021—making it more challenging than ever to address the fraud threat while meeting increasing customer expectations.
The rising fraud threat
2020 saw a rapid influx of customers using digital channels and the amount of data flowing into financial systems. There’s been a seismic shift, and we’re not going back. According to a recent study, 80% of consumers now prefer to manage their finances digitally, leaving the door open for fraudsters to take advantage of digital newbies.
The increase in online activity corresponded with criminal activity. The rates of synthetic identity, account opening, and account takeover fraud have risen as fraudsters’ tactics have evolved.
- 80% of fraud losses now come from synthetic identities
- In 2020 the rate of new account credit card fraud attempts rose 48%
- Account takeover accounted for 54% of all fraud attacks in 2020
Fraudsters will continue to take advantage of current conditions, moving from stimulus-related fraud back to more traditional forms of financial theft, and financial institutions must adapt in turn with robust identity layers.
Resolving the identity threat
In our recent white paper, developed in partnership with One World Identity, we explore how businesses can address the fraud threat. It requires a multilayered identity proofing strategy for both onboarding and ongoing authentication. By doing this, financial institutions can gain a holistic view of consumers and their associated risks, decreasing friction while enabling robust fraud protection.
To learn more, download our “Improving Fraud by Increasing Identity Layers” white paper.
