Identity Fraud Insights: New Account Fraud Threats Demand AI-Based Solutions

Money2020 is like a fintech homecoming. It’s one of the few gatherings in the world, where 10,000 fintech professionals — who have known each other for decades — converge to tackle the same question: How do we innovate in financial services to optimize the way people live their lives and businesses make money?

It is because of this captive audience of visionary fintech minds that Socure took the opportunity to run an Identity Fraud Insights survey at 2019’s Money2020 Conference.

Digital identity is the heartbeat of fintech innovation. Without a dynamic, digital identity, there can be no connected banking, digital-first services, alternative lending or persistent payments. You must first know and trust Day Zero Identity before you can open the gates to a complicated fintech ecosystem.

Our Identity Fraud Insights Survey was short and sweet — 10 questions — meant to capture top-of-mind challenges. We hit 55 unique respondents, all of whom are responsible for fintech product development or delivery.

We got some interesting responses, including a few that remind me of the messages and product that we, at Socure, need to drive home to the fintech community:

• New Account Fraud: Nearly 70% are facing a myriad of identity fraud challenges, ranging from third-party account takeover to new account fraud. Account takeover is the bread and butter of fraud of perpetrators. There are endless paths in. But new account fraud particularly stands out to me. Our large neo-bank clients enroll 1m+ Day Zero Identities a month. And enrollment is a near-real-time event. Meanwhile, these organizations face new account fraud, which can range from Synthetic Identity attacks to credit card and lending abuse.
• AI, but not for identity? Also notable, while 70% of respondents are using AI-based solutions in their organization for everything from marketing to customer service, only about 35% are using it for fraud prevention and 27% are using it for identity verification and risk. That latter number reminds me that many organizations are still tackling Day Zero Identity challenges – with the possibility of new account fraud – with outdated solutions which either rely on rules or apply analytics, but still don’t curate and correlate a wide enough breadth of data to provide a true multidimensional view of identity. The problem of new account fraud will only grow if organizations don’t begin to leverage more sophisticated identity solutions.

Socure is diligently focused on providing a comprehensive identity solution that aims first and foremost to enable real-time enrollment within the context of fraud risk prevention and intelligent KYC and regulatory compliance. This is because we know that identity lies at the heart of an interconnected fintech ecosystem in which digital challengers, legacy banks and payment rails merge infrastructure to optimize lives. We look forward to enabling trusted engagements in this environment.

As always, I look forward to hearing from you.