Aite-Novarica Group, a leading advisory firm providing research on the technology, regulations, strategy, and operations of the banking and financial world, just released a new report titled Market Trends in Fraud for 2022 and Beyond. The report analyzes results from a survey of Aite’s financial institution clients, with a focus on the changing environmental conditions that are accelerating fraud attacks around identity theft, stolen credentials, and much more.
We’ve already been paying close attention to what promises to be a shifting fraud landscape this year, with some trend predictions of our own highlighted in this series from Socure fraud expert Mike Cook. In Aite’s new 27-page report, they present some intriguing predictions and priorities for financial institutions that align with our internal experts’ takes—but there were also a few surprises! Here are three takeaways that stood out to Socure’s team of fraud experts, and how Socure is prepared to tackle these challenges head-on.
1. New Fraudsters Are Using Familiar Attack Patterns
“As these new fraudsters mature, the market will see sustained rates of growth in application fraud and account takeover (ATO) attacks . . . Some persistent themes and attack patterns, such as application fraud and ATO, remain, but significant new developments are at work that could challenge how FIs manage fraud in the future . . .” – Aite
As application fraud and account takeover attacks continue to mature as they target financial institutions (FI), Socure’s solutions are ready. Socure Sigma Identity Fraud, Sigma Synthetic Fraud, and RiskScores enable you to predict and prevent these types of fraud by providing the most accurate identification of fraudsters, analyzing every dimension of consumer identity—name, email, phone, address, date of birth, SSN, IP, device, velocity, network and behavioral intelligence, and more—through a single ML model. Socure captures 85%-90% of fraud in the top 3% of riskiest users and reduces false positives by more than 13X compared to legacy solutions.
2. Emerging Tactics Are Appealing to the Next Generation of Fraudsters
“The pandemic era has expanded the ranks of fraudsters, and most of these new ‘citizen fraudsters’ are here to stay . . . As fraudsters of all stripes seek to fill the void in revenue left by stimulus fraud, they will migrate to scams and other forms of fraud that require relatively little in the way of technical proficiency and that depend on the use of stolen and synthetic identities.” – Aite
ATO and application fraud will always be around, but new approaches (such as PII tumbling) are also emerging from a new rank of fraudsters dubbed “citizen fraudsters” by Aite. These are people who aren’t financial criminals per say, but are lured in by clear opportunities. A key strategy for how Socure stays ahead of evolving fraud—be it emerging with new players or evolving with traditional strategies—is our consortium approach. Trained with feedback data from the industry’s leading consortium of clients, Sigma delivers more accurate fraud models that improve over time based on continual feedback data. As the Socure customer consortium gets larger, it also gets smarter by using feedback data from the expanding network to continually improve results to counter evolving fraud patterns.
3. Smart Innovations and Investments are Paramount
“Many of the macro-level trends that have shaped the market for fraud solutions remain potent forces of influence today, and most are likely to continue to guide investment priorities in 2022 and for years to come. Among the most notable of those trends are the push to optimize management of the quality, risk, and throughput of the application and onboarding processes; the need to improve the optimization of the risk and friction of authentication; and the need to tame and/or orchestrate the growing quantity and diversity of signal detection and decision-support platforms to improve the ability to optimize the balance between efficiency, effectiveness, and client experience in general.” – Aite
In order to maximize their technology investments, fraud executives must prioritize the solutions that successfully assess fraud while enabling rapid onboarding of good customers through accurate identity verification.
Socure’s industry-leading ID+ platform combines best-in-class solutions for KYC/AML compliance, identity verification, and fraud risk prediction through a single API. By leveraging the most precise identity fraud classification model in the industry, you can drastically reduce fraud losses, instantly onboard more good customers into your ecosystem, and reduce friction for a top-notch customer experience.
Download a complimentary copy of Aite’s 2022 Market Fraud Trends Report, and schedule a demo with our solution experts to see what implementing the best practices for identity fraud detection can do for your business.
Todd is Senior Director for Product Marketing at Socure, where he manages marketing for Socure’s Fraud suite of offerings. Prior to Socure, Todd worked in cybersecurity and identity at companies including Arctic Wolf Networks, Nok Nok Labs, Vormetric/Thales, and Trend Micro.