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Kevin Gosschalk, founder and CEO at Arkose Labs, and I met virtually on December 15 to talk about the fraud trends we believe will impact 2021 and the years to come, including the overlapping effects of the COVID-19 pandemic.

As Kevin explained it, Arkose Labs bankrupts the business model of fraud with an innovative approach to determining user intent and remediates attacks in real time for use cases including compromised accounts due to credential stuffing, enrollment fraud, and gift card fraud. Risk assessments combined with interactive authentication challenges undermine the ROI behind attacks.

As founder and CEO at Socure, I’m proud to say our team has built a predictive analytics platform for verifying a consumer is who they say they are when presenting a new identity across any B2C digital application. Be it a bank, fintech, online gaming operator, or online prescription refill business, we verify for both fraud risk and regulatory purposes.

Read our last three predictions and a recap of that conversation below, or you can view the webinar in its entirety herePart 1 of this recap, including the other four predictions, was published last week.

Vox Populi: Social Movements Will Create New Businesses Vulnerable to Fraud

State agencies were hit this year with a vertical curve of massive unemployment growth like this country has never seen before. Fraudsters attacked them because they were doing very little in terms of identity verification and fraud classification on people seeking unemployment claims. They became caught in this trap between sending millions of dollars externally to the wrong people and getting money to legitimate claimants. So, they stopped sending money altogether.

It results in an infrastructure and scale problem that requires the appropriate tooling to solve those challenges by deploying appropriate APIs and fraud solutions very quickly. We’ll continue to see these kinds of issues in the future, so, moving forward, any entity or business involved with the distribution of a financial product should take note.

The Evolving Regulatory Landscape Will Drive Innovation

I can’t believe I’m admitting it, but there’s a bill in front of Congress right now, called the Improving Digital Identity Act of 2020, that’s going to bring some good regulatory change which will spur innovation to solve some of the scale-based issues we saw in 2020, like the issue with state unemployment agencies that we just discussed.

Kevin pointed out that GDPR (General Data Protection Regulation) in Europe has been successful in forcing companies to think about privacy and security issues. They must look beyond “is your infrastructure holding our data?” to also consider other factors, such as what is being done with that data, what is being collected, who owns it, and so forth.

We can’t leave this subject without mentioning the interesting balance needed between security challenges and customer experience. While many consumers want a one-click, totally passive user experience across the Internet, there is the product challenge of ensuring there are appropriate tooling and controls. In this regard, what wasn’t sexy five or 7 years ago is actually very attractive now: utilizing machine learning and the newest forms of predictive analytics can solve these problems and enable new innovation and enterprises. Within a regulatory framework to make these more accurate decisions, I see it pushing new standards and utilizing biometrics, machine learning, and mass amounts of data at scale.

When Socure works with regulators, which we do across banking, gaming, and HIPAA (Health Insurance Portability and Accountability Act) verticals, they are excited about these type of technologies and tools because we’re not only saving someone’s fraud bottom line, but we’re actually doing a real service for consumers and giving them a better user experience and, furthermore, saving their identities from being stolen and manipulated at scale.

With everyone operating largely on the Internet now—from kids and teenagers on up—and with more activity moving to the Web and mobile only, verifying people and identifying risk is only going to get more challenging by the day.

Heightened Fraud Attacks Will Be the New Normal

With wider attack surfaces, more online activity, ongoing stimulus funds, and the number of places that lack sophisticated controls, these are just easy ways to steal money in many forms. No doubt, we can expect heightened fraud attacks to be the new normal.

The ability to hide in a remote world where people move fraudulent gift cards, stolen cell phones, or money between bank accounts, it makes the job of identifying bad actors that much more difficult because they are operating under the radar. It’s important to iterate that even though there is a large incentive structure and a huge population of criminals, your business can take precautions to prevent these schemes and scams.

Kevin and I are both fortunate to talk to a large number of companies to learn about the latest attack patterns. An important question to ask yourself: what is it about my product or service where a criminal can make money? Then add the appropriate friction and controls to mitigate that risk.

Please reach out to us if you have further questions or want to learn more about Socure at

Johnny Ayers
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Johnny Ayers

Johnny Ayers

Johnny Ayers is founder and CEO of Socure. Since founding the company in 2012, he has had a number of roles, including managing and leading strategy for the Direct Sales, Channel, Product, and Growth organizations. Johnny has been instrumental in building the company's tremendous customer base and suite of industry-leading digital identity verification and fraud prevention solutions. He is also a frequent expert speaker on fraud, authentication, and KYC/AML, and has been quoted in publications such as the WSJ, Forbes, Bloomberg, Thomson Reuters, Cheddar,, and more. In 2022 he was awarded Ernst & Young’s Entrepreneur of the Year, Finovate Executive of the Year, and has been named by Goldman Sachs as one of the top 100 Entrepreneurs of 2021 and 2022. Outside of Socure, Johnny is an investor in and an advisor to companies including; Acorns, Alloy, Astra, Bask, BillGo, Chipper Cash, Commerce Ventures, Curve, MoCaFi, and more.