Insights From Your Industry Peers
Our 2019 study includes executive participants from all corners of financial services and lending:
The issues that weigh on these financial firms generally center around revenue loss, the inability to stay ahead of emerging fraud risks, and the pressure to provide seamless digital experiences.
Thieves continue to pursue their old tricks and have added new ones to the mix.
We see a significant increase in the use of mobile channels since 2018. A sizeable majority of participants now offer this option to meet consumer demand for speed and convenience. Meanwhile, these firms also perceive mobile to be more vulnerable to fraud and more difficult to manage against customer friction. Their concerns about risk are warranted: the financial services industry saw mobile account login attacks surge 107% in the second half of 2018, compared to a 37% increase in account takeover via the desktop channel1. Consumer behaviors such as using open WiFi networks, staying logged into apps/websites and exposing themselves to malware compound the problem.
Several factors make synthetic identity fraud attractive to fraudsters: data breaches and the accessibility of Personally identifiable information (PII); gaps in the credit process; and inability to detect this type of fraud. The perpetrators are smart: They’ll spend a little time nurturing the identity to mimic a good customer, establishing good credit, paying on time, etc. before breaking bad and doing harm. They also know exactly what they need to pass through certain checkpoints.
A majority of banks reported a double-digit year-over-year growth in malicious botnet activities. Mobile botnets infect devices with malware that allows them to steal identities, hack accounts and make fraudulent purchases—all without the consumer’s knowledge. A significant chunk of respondents said that “distinguishing between automated bots and humans” is one of their top 3 online fraud challenges.
While foreign transactions are decreasing among lenders, they are growing at banks and investment firms, especially mid/large digital banks. With international transactions comes more complexity around availability of data, privacy regulations and more. When these transactions are made via mobile devices, firms often have difficulty identifying geolocation which seriously impacts identity verification.
See The Way Forward
True Cost of Fraud covers a lot of ground, but it also clarifies areas of focus as you fortify your risk management strategy:
Get caught up on the latest information in financial services and lending fraud. Read the full report at link below.
1 ThreatMetrix®, H2 2018 Cybercrime Report