In a rapidly evolving world driven by remote work and digital connectivity, we’ve unlocked a range of services that revolutionize the way we operate. While this digital transformation has delivered remarkable benefits with digital transactions and remote services, it has also exposed businesses to a growing threat as more processes become digitalized: identity fraud.
A recent report from Transunion found that global growth in suspected digital fraud rose more than 52% between 2019 and 2021. And in financial services, digital fraud increased by more than 60% over the same period.
While these numbers are startling, they also point to how a quickly evolving digital landscape creates a growing knowledge gap between how modern identity fraud happens and how existing technologies defend against it.
To better understand how to spot and anticipate identity fraud, let’s take a closer look at what types of fraud financial institutions are up against today. Then, we’ll dive deeper into the critical role of identity verification and Know Your Customer (KYC) procedures and in defending your organization against identity fraud.
Labeled one of the top 15 cyber threats by the European Network and Information Security Agency in the ENISA report – identity theft has the potential to affect anyone and everyone. So, safeguarding against it within your organization requires more nuanced knowledge.
Understanding the mission of a bad actor can help to anticipate their attempts at fraud. Fraudsters typically have one of two goals: stealing the identity of an existing person or creating an identity from scratch. Some of them could also simply buy stolen or synthetic identities on the dark web. Creating an identity from scratch is technically not identity fraud, but rather considered counterfeiting or false identity.
When a would-be criminal tries to assume someone else’s identity, this is spoofing. Spoofing also includes identity fraud carried out on identity documents or by co-opting someone else’s face. For example, a fraudster could pose as a government worker and share phishing website links that look official to collect sensitive identity details.
Learn more: What is digital identity?
When discussing document fraud, it’s essential to distinguish the physical techniques from newer digital methods, which have emerged in the last few years with increased remote transactions. In the case of counterfeits or physical falsifications, the documents are reproduced or modified “by hand.”
New technologies assist digital falsification techniques, sometimes making them more challenging to detect.
Most of us are familiar with the idea that personal documents are vulnerable to fraudulent attacks. However, fraudsters are also now leveraging a person’s biometric data to commit identity theft in the form of “facial spoofing.”
“Facial spoofing” describes using a person’s face to impersonate them and leverage their personal data. It sounds like something from a spy movie, but fraudsters are increasingly using sophisticated artificial intelligence instead of donning prosthetics and a wig.
Modern businesses offering remote transactions need to be aware of the different emerging types of identity fraud. On the other side of the evolving identity fraud race is intelligent technology explicitly built to defend against these attacks. And, at the heart of a reliable anti-fraud plan is a secure identity verification procedure.
As part of this fight against fraud and criminal activity, governments have also implemented robust AML-CFT and KYC verification requirements. Fintech, financial services, insurance companies and their customers are just some of the parties affected.
KYC and online identity verification are essential steps for users to access certain services online. And we built our Identity Verification solution to stay one step ahead of the ever-changing identity fraud landscape.
Since 2018, we’ve relied on an uncompromising security model to make sure our online identity verification provides an experience as reliable as a face-to-face encounter. Artificial intelligence and human operators support our video-streaming identification for remote identity verification. In real time, we mitigate fraud attacks via two core methods:
Our fraud experts also verify the consistency and integrity of incoming identity documents – specifically focusing on the document's printed background and shape or texture, among other dynamic security elements.
If you're ready to get ahead of fraudulent attacks, find out more Identity Verification by Checkout.com today.
Checkout.com's Identity Verification solution was originally developed by ubble, and is the first remote identity verification solution to receive the ANSSI Security Visa. ubble is now part of the Checkout.com company. To read more about Checkout.com’s acquisition of ubble, read here.