Future-Proof Your Fight Against Fraud

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Why do fraudsters keep outsmarting AI-powered IDV?

What we all ask – and rightfully so – is this: With all the advances in technology like facial recognition, adaptive analytics, automation, and machine learning that have been made to detect identity fraud, why are the numbers growing?

New year, new fraud. Why are the numbers growing?

Up until the recent past, documents such as passports and driver’s licenses were some of the few identifiers outside of our parents. However, with the introduction of digital footprints on sites such as social media and e-commerce outlets, as well as recent technologies like facial recognition and machine learning, this is no longer the case. With our identity now distributed among multiple sources and channels, it is increasingly necessary to protect and manage our details securely.

Everyone knows by now that last year fraudsters stepped up their attacks. Identity fraud losses climbed to $52 billion (about $160 per person in the US) US in 2022 as fraudsters, often operating as organized crime cells, tapped into synthetic identity scams, automated bots, and other tools to skirt digital identity verification technology. We also know that the numbers are expected to increase – synthetic fraud loss will double by 2024.

What we all ask – and rightfully so – is this: With all the advances in technology like facial recognition, adaptive analytics, automation, and machine learning made to detect identity fraud, why are the numbers growing?

There are a few reasons – let’s take a closer look at two of them.

For one, high-level forgery has never been easier. Fake IDs are a big business. Anyone can do an internet search and find dozens of forgery services offering downloadable templates online.

The increased use of automation by legitimate businesses to improve efficiency has been paralleled by criminal groups utilizing machine learning, bots, and other software techniques to acquire illicit income and data. This has allowed them to convert fake IDs into a large-scale business. These activities often involve sophisticated-looking websites with one-click access to cryptocurrency exchanges and payment platforms. Automation provides criminals with many creative opportunities to carry out malicious activities, from international money laundering to small-scale frauds like collecting a $50 gift card via an online form with a false identity.

Unlock the power of identification verification (IDV)

The identity landscape is changing – we were once identified by plastic, and soon we will rely on digital identification. Businesses must become identity intelligent within the digital ecosystem to protect what matters most – your customer’s privacy and your brand’s reputation. If these two components are secure, the risk of monetary loss to both parties from malicious identity fraud significantly decreases.

It’s tricky. You must consider privacy, calculate risk, and appreciate that there’s no static, one-size-fits-all answer. Identity goes far beyond what can be seen on an official document; it comprises every characteristic – from nicknames, phone numbers, online accounts, educational certifications, and transaction trends. These facets of identity have become more relevant in areas that do not simply include banking or traveling. Businesses are required to understand and handle identity details with respect, and the most successful businesses make use of identity intelligence to weigh risks and threats without interrupting the way we access our medical care, reserve cars with our cell phones, or take advantage of workplace assets. For example, banks can identify the likelihood of fraudulent activities due to their understanding of spending behaviors. That’s why attributes like modularity, transparency, tokenization, and privacy by design are crucial when building the future of identity within any business.

How to fight sophisticated fraud

How can companies improve their ID verification and fraud detection? One approach is defense in depth. We can spot ID fraud as it happens and sometimes even before.

Case and behavioral level analysis can also influence your confidence in someone’s identity. If the same person tries to access a service from opposite sides of the world in an hour, an algorithm should get suspicious. The power of a collaborative tool that shares online data and behaviors helps members of a consortium leverage innovative neural networks to stay one step ahead of even the most sophisticated fraudsters and their synthetic fraud attacks, improving identity confidence for everyone.

Identity remains a vital component of our lives no matter where we live. Establishing a secure, automated, and dependable identity system in an organization is essential to ensuring that it plays its part in a fraud-free and secure environment.

How Intelligent is Your Remote Identity Verification Platform? Do you know if it can help you answer these six questions?

  1. Is this really you?
  2. Are you a live person?
  3. Have we seen you before?
  4. Are you a “real” person?
  5. Are you on a sanction list?
  6. Are we completely sure about everything?

If you answered “no” to any of these questions, it’s time to get serious about fraud. Building defense in depth means that your IDV platform has the built-in power to verify an ID using 100% automation, biometric testing to determine “liveness,” a synthetic fraud-busting consortium of neural networks, an electronic identity verification to keep blacklisted individuals out, and a thorough, manual double-check as the final say when there is room for doubt from poor quality images or damaged documents. If this stack sounds like too much, tapping into the power of an orchestrator that accommodates customization can make it all come together beautifully through a predetermined workflow. An ideal identity verification solution will be intelligently built to suit your needs and optimize your user experience.

Future-proofing your IDV system is the only way to outsmart fraud.

This takes work, but the benefits for businesses go beyond compliance with laws. It can reduce the financial losses associated with fraud and protect the online conveniences that we have all come to rely on. The McKinsey Global Institute believes that implementing complete digital ID coverage can raise GDP by 13%. Given the opportunity for such considerable returns, developing an inclusive and contextual identity framework is no longer a mere possibility. It has become imperative from a societal perspective. It also builds trust with customers. People appreciate organizations that handle their data responsibly.

Managing identity responsibly creates financial value by empowering businesses to offer digital services. The impetus to understand identity is clear, but it’s up to businesses to embrace it, investing the time and effort to protect their customers’ data and their reputations.

Source:Report Examines Rise Of Synthetic Identity Fraud

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