Tag: CyberCrime

Last month, Kenneth Blanco, Director of the Financial Crimes Enforcement Network, warned that cybercriminals are stealing data from fintech platforms to create synthetic identities and commit fraud. These actions, in turn, are alleged to be responsible for exploiting fintech platforms’ integration with other financial institutions, putting banks and consumers at risk. According to Blanco, “by using stolen data to create fraudulent accounts on fintech platforms, cybercriminals can exploit the platforms’ integration with various financial services to initiate seemingly legitimate financial activity while creating a degree of separation from traditional fraud detection efforts.” Fintech executives were quick to respond, and while agreeing that synthetic IDs are a problem, they pushed back on the notion that cybercriminals specifically target fintech platforms. Innovation and technology have indeed opened new doors of possibility for financial institutions, however, the question remains as to whether it has also created an opportunity for criminals to implement more sophisticated fraud strategies. Currently, there appears to be little evidence pointing to an acute vulnerability of fintech firms, but one thing can be said for certain: synthetic ID fraud is the fastest-growing financial crime in the United States. Perhaps, in part, because it can be difficult to detect. Synthetic ID is a type of fraud carried out by criminals that have created fictitious identities. Truly savvy fraudsters can make these identities nearly indistinguishable from real ones. According to Kathleen Peters, Experian’s SVP, Head of Fraud and Identity, it typically takes fraudsters 12 to 18 months to create and nurture a synthetic identity before it’s ready to “bust out” – the act of building a credit history with the intent of maxing out all available credit and eventually disappearing. These types of fraud attacks are concerning to any company’s bottom line. Experian’s 2019 Global Fraud and Identity Report further details the financial impact of fraud, noting that 55% of businesses globally reported an increase in fraud-related losses over the past 12 months. Given the significant risk factor, organizations across the board need to make meaningful investments in fraud prevention strategies. In many circumstances, the pace of fraud is so fast that by the time organizations implement solutions, the shelf life may already be old. To stay ahead of fraudsters, companies must be proactive about future-proofing their fraud strategies and toolkits. And the advantage that many fintech companies have is their aptitude for being nimble and propensity for early adoption. Experian can help too. Our Synthetic Fraud Risk Level Indicator helps both fintechs and traditional financial institutions in identifying applicants likely to be associated with a synthetic identity based on a complex set of relationships and account conditions over time. This indicator is now available in our credit report, allowing organizations to reduce exposure to identity fraud through early detection. To learn more about Experian’s Synthetic Fraud Risk Level Indicator click here, or visit experian.com/fintech.

Last week we had the pleasure of joining more than 400 clients at the 35th annual Vision Conference — connecting business leaders to ideas and solutions. Over the next few weeks, we’ll be sharing some insights from our fraud and identity dedicated session track. I had the pleasure of presenting alongside the U.S. Secret Service, and we had a packed session to discuss the Dark Web — what it is, how it’s accessed, how criminals are exploiting it to commit fraud and the human impact of the massive global cybercrime problem. According to McAfee®, cybercrime represents a $500 billion cost to the global economy — and that’s projected to rise to $600 billion this year, outpacing any other form of crime. With the Internet economy generating between $2 trillion and $3 trillion annually, that means cybercrime is extracting roughly 15 to 20 percent of the entire value created by the Internet. This is a massive problem, and it’s not going away. Unfortunately, there are countless tools and services to commit fraud available on the Web, providing attackers with the cloak of anonymity they need to compromise accounts, mimic legitimate users and submit fraudulent transactions. Device intelligence helps unmask these activities. It is a critical component to defend against the threat, and it provides insight into every interaction throughout a typical customer journey (from account setup to login and account maintenance to transactions). Without this visibility into users’ historical behavior and typical population patterns, organizations often have limited options to target attackers and identify anomalous behaviors. This is key to a successful cybercrime detection and mitigation strategy. Another important point in the session regarded recent law enforcement and private industry successes in identifying, tracking, apprehending and prosecuting online attackers. We thankfully have made significant strides in this area, as evidenced by the work of the Secret Service and other law enforcement organizations, but the collaboration must continue — and intensify. As mentioned in a CNBC story published on the same day as our presentation, the Dark Web is an increasingly mainstream source for everything from financial crime to drug trade and human trafficking. Unfortunately, most businesses are in the dark about the growing criminal underground, but Experian can help. With proper fraud expertise and innovative tools to defend against these ever-evolving threats, organizations can uncloak the attackers and safeguard the business.