Synthetic Fraud, Identity Verification in Government, and the Endless Pursuit of More Digital Customers: Perspectives on Money20/20

Attendees of this year’s Money20/20, fintech’s biggest and most important showcase event, praised this year’s edition for covering a wide range of topics with new insights and perspectives. Billed as “fintech’s biggest conversation,” Money20/20 has grown to encompass every aspect of digital money, from payments to financial services, and across all industries. Everyone with an interest in shaping the future of money comes away from the event armed with usable insights and a new vision.

Socure’s imprint on this year’s edition started even before the event when we we published, “The State of Synthetic Fraud: Evolution, Trends, and How We Will Eradicate it By 2026,” which uncovered revealing patterns about how fraudsters construct synthetic identities that may assist in identifying and thwarting this kind of crime. The research reveals some of the most common identity elements of synthetic identities, including the most common names criminals give them.

We also introduced attendees to the concept of progressive customer onboarding. This is an approach that measures “risk as you go,” and allows organizations to apply different levels of assessment as consumers advance in their activity and corresponding risk potential. Not every user requires a complicated identity check at first touch, so Socure introduced this risk-based approach which helps organizations build trusted online customer relationships.

The growing issue of identity fraud and dark markets

In a keynote session, Socure’s CEO, Johnny Ayers, addressed the role of identity verification and fraud detection in eliminating the money laundering that supports human trafficking, the drug trade, and other nefarious international crimes. Johnny and investigative journalist Mariana van Zeller, host of National Geographic’s “Trafficked,” discussed efforts to curtail the ability for criminals to move vast sums of money through digital sources. 

In this session, Ayers pointed out that 50% of the global economy is made up of black and gray markets, yet less than 1% of money laundering is caught. It’s clear, according to Ayers, that money launderers need an onramp into the financial system and use thousands of stolen and synthetic identities to create accounts to move money. Organizations need an accurate identity verification solution that can identify a fake or stolen identity at account opening, in real-time, to eliminate this illicit activity from the financial services ecosystem.

The state of identity verification in government

Jordan Burris, Socure’s Vice President of Public Sector Strategy, led a panel about identity verification in the government, which outlined initiatives around identity verification and fraud prevention within federal and state agencies, and how the government can take a page from the fintech playbook. 

Burris explained that the way the US government has approached identity verification is fragmented and broken. He pointed out that the solutions being used are getting 60% of the public through the benefits system, and the rest go to manual review, which has been considered “good enough.”  But Burris explained that this can be rectified if the public and private sectors work together. Performance evaluation has long been missing and the government can take a page from the financial services industry which is known for thoroughly testing solutions. Ultimately, the goal is to strengthen our systems across all sectors through better identity verification.

Insights from the Socure Team

One of the benefits of an immersive event like this is being around a broad array of speakers, ideas, and perspectives. In hallway conversations and impromptu exchanges, our Socure team members gleaned some new insights, which we share here:

“Synthetic fraud is still a mystery, even to those risk managers who are being impacted by it. The shifting pattern of synthetics from fast cash and bust-out to fraudulent money movement is not understood, and even though it has existed for more than 20 years, it’s clear that we have a lot of work to do to eradicate synthetic fraud by 2026. The good news from Money20/20 is that the right people are paying attention and appear willing to commit to fostering education and policy changes and being more collaborative among their peers to make the necessary changes.” – Mike Cook, VP Fraud Solutions

“There was a major emphasis on speed-to-enablement (get more consumers onboarded and start engaging with them as quickly as possible), and the good news is that most fraud and customer leaders recognize the need to eliminate friction as a way to scale and increase customer growth. Many pointed to strategies that require the minimal amount of identity information possible as a way to improve onboarding time. Yet some aren’t thinking through the repercussions if this isn’t done correctly. Ultimately, greasing the tracks for consumers also means the same ease of access for the bad guys. It’s clear that a lot of education still needs to happen to create awareness about the importance of accuracy coupled with speed, and the fact that these things can coexist.” – Jeff Scheidel, VP Education

“Two things really stood out from my perspective. First off, document verification is finally getting the attention it deserves, and it’s clear there’s much greater demand for it than ever before. Organizations are better informed about how to identify the right type of document verification solution that doesn’t contribute friction to the customer onboarding process. Secondly, it’s clear that real-time money movement is on everyone’s mind. Government and private sector fraud leaders alike are focused on speeding up the pace of money but doing it in a way that eliminates as much risk as possible.” – Eric Woodward, Senior Advisor to CEO

“Money20/20 always offers a great barometer of investment and innovation trends. One area that stood out this year is the alternative data space. There continues to be significant activity and demand, especially for solutions that improve and expand underwriting. This year, it was clear that there’s an increase in consumer-permissioned solutions such as income verification.” – Kevin Kupiec, SVP Product Management