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ProductsFraud & RiskComplianceID + BiometricAccount IntelligenceExplore the future of identity verification and trust with our comprehensive suite of AI-powered products.Fraud & RiskComplianceID + BiometricAccount IntelligenceSigma Identity Fraudfor the most accurate third-party fraud detection leveraging a 360° view of digital identityPhone RiskScoreto instantly predict risk and verify phone ownershipSigma Synthetic Fraudfor uncovering complex manipulated and fabricated synthetic identity fraudAddress RiskScoreto instantly predict the risk connected with physical addressesSigma First-Party Fraudfor minimizing early payment default, bad faith dispute abuse, and chargeback lossesDigital Intelligencefor passively verifying user devices behavioral biometrics to to detect fraud and improve UXEmail RiskScoreto instantly predict risk and verify email ownershipGraph Intelligenceto quickly transform complex identity connections into actionable insightsPortfolio Scrubreveal compliance and fraud risks in your existing customer accountseCBSVfor instantly verifying a consumer-provided name-DOB-SSN match with the SSASocure Verify Plusfor precise, accurate, and inclusive identity verificationGlobal Watchlist Screening with Monitoringfor sanctions screening, PEP, and adverse media risk managementDeceased Checkfor validating deceased identities at any point in the user lifecyclePredictive DocVfor quick and accurate ID document and biometric verification with liveness detectionSocure Acccount IntelligenceVerify bank account ownership and status with inclusive, instant resultsGet customized strategies from our experts to drive your success. Start now.Get a Demo
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Public SectorSocure empowers governments to combat identity fraud while ensuring equitable access to public services. Our AI-driven platform delivers unparalleled accuracy in identity verification, helping agencies stop fraudsters without compromising access for underserved populations.
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How a top five U.S. bank identified risk associated with synthetics and potential mules in its customer accounts
Discover how a bank gained crucial insights into its portfolio of customer accounts to avoid severe financial and compliance penalties.
Did you know that 1-3% or more of open deposit accounts in the U.S. are held by synthetic identities, likely acting as money mules to fuel fraudulent money movement?
With such a high rate of fraud, there’s a full expectation that regulatory changes will eventually transform how banks and fintechs operate specific to these types of accounts. To combat risks such as synthetic identity fraud and money mules to their organizations, leaders must scrutinize the consumer identities within their existing accounts with tools that allow them to identify these synthetic and mule accounts – all while continuing to fine tune customer onboarding strategies and fraud controls.
Rates of synthetic identity fraud only continue to grow. Effectively addressing this threat starts with understanding the book of business that comprises your portfolio, who your customers are, and how those accounts are used and potentially abused for money mule activities.
Deposit, investment, and savings accounts are frequently used by money mules to launder money and fuel fraudulent money movement through P2P, wire transfer, ACH and other real-time payment rails. Fraudsters can use real people who are either aware or unaware of the scam, synthetic identities created using stolen or fabricated information and other fraudulent identity types to aid in the money movement. Synthetic identities are particularly challenging to detect because they often use valid Personal Identifiable Information (PII). Fraudsters can also use synthetic identities to open bank accounts, apply for loans or credit, and conduct other financial transactions.
When a top five U.S. bank wanted to identify customer accounts that could cause financial or reputational harm to their organization, it turned to Socure.
Synthetic fraudsters are attacking deposit institutions at an increasing rate. Socure analysis shows that 1-3% or more of open deposit accounts in the U.S. are held by synthetic identities, likely acting as money mules to fuel fraudulent money movement.
Socure Portfolio Scrub
As the leader in digital identity verification and fraud prevention solutions, Socure’s Portfolio Scrub helps fintechs and traditional banks uncover fraud and compliance risks that may have slipped through the cracks at, or after, account opening. This includes third-party and synthetic fraud risk, account takeover, high risk addresses, SSNs, emails, phones, and more.
The Portfolio Scrub analysis includes:
- Identification of risk attributes to support periodic or perpetual Know Your Customer (KYC) or Customer Risk Rating (CRR) data points.
- Data quality reviews to support deceased, contact, and new move updates that can impact current accounts.
- Identification of risky identities hiding within a portfolio, including synthetic identities and third party fraud that may have slipped through account onboarding defenses.
Accounts that may have been previously taken over
These valuable insights help organizations identify and understand their largest potential risk areas and receive individual, customer-level treatment strategies and remediation recommendations to reduce risk.
Socure’s impact
Working with Socure’s data science experts, this top-tier bank provided and tested ~2 million records of existing customer data for both credit cards and deposit, originating from digital and non-digital onboarding, as well as digital credit card businesses. Socure then ran the records through our Sigma Identity Fraud, Sigma Synthetic Fraud, Verify, and Email, Phone, Address RiskScores and Correlation Value modules.
Socure found that ~2% of the bank’s open accounts exhibited high risk for either KYC compliance issues or identity fraud. These accounts exhibited invalid email addresses, phone numbers known to be associated with fraud, addresses for commercial reshippers, and a host of other signals highly correlated with fraud.
Additionally, 30,000 of the ~2 million accounts tested were opened by either a manipulated or fabricated synthetic identity, with a higher percentage of fabricated synthetic identities, which are known to incur significantly higher losses for banking institutions.
While analyzing the individual risk signals returned in the form of Socure’s proprietary reason codes, the team found that 0.76% of SSNs across the bank’s three lines of businesses were invalid, associated with a deceased individual, or did not resolve to the originating PII. Additionally, 25% of addresses being used as an individuals’ address were either invalid or commercial, dual-purpose, or prison addresses.
“Socure found that 30,000 of the bank’s ~2 million accounts tested were opened by either a manipulated or fabricated synthetic identity, with a higher percentage of fabricated synthetic identities.
Socure Reason Code | Percentage of Accounts |
R972 – Address is a commercial mail receiving agency or commercial mail drop | ~0.2% |
R709 – Address labeled as commercial or dual-purpose | ~2% |
R916 – Address labeled as invalid or does not exist | ~6% |
R932 – Address identified as correctional facility | ~0.01% |
Socure Reason Code | Percentage of Accounts |
R901 – SSN does not resolve to individual | 8% |
R907 – SSN reported as deceased | 0.25% |
R913 – SSN invalid | 0.06% |
Moving forward
Alone, these individual PII elements may not have flagged an account as high risk. However, financial institutions can’t afford to lack awareness of the potential risk within their portfolio.
Armed with real insights into the risk of its existing portfolio, this bank worked with Socure to implement custom remediations such as additional account monitoring or step-up authentication such as eCBSV, as well as using Socure’s DocV solution for document and live selfie validation.
It’s critical to understand and reassess current onboarding strategies to prevent invalid information or risk, in any form, from coming into your ecosystem. Now is the time for responsible financial institutions to take a deep look at the consumer identities of account holders to tease out financial and compliance risks, before the potential reality of a changing regulatory and economic landscape puts them further at risk.
Who’s lurking in your portfolio?
~2M
Bank records tested
~2%
Records with high KYC or identity fraud risk
30K
Records created with manipulated or fabricated identities
Challenges
- Economic and regulatory pressure
- Lack of insight into current risk within existing customer base
Solutions
- Through a Portfolio Scrub, Socure identified risk attributes to support periodic or perpetual Know Your Customer (KYC) or Customer Risk Rating (CRR) data points
- Performed data quality reviews to support deceased, contact, and new move updates that can impact current accounts
- Pinpointed risky identities hiding within a portfolio, including synthetic identities and third party fraud that may have slipped through account onboarding defenses
Key Results
- Out of ~2 million records, Socure found that ~2% of the bank’s open accounts were high risk for KYC compliance or identity fraud
- 30,000 of the reviewed accounts were opened by manipulated or fabricated synthetic identities
Let us prove it.
Join the 2,700+ top enterprises that trust Socure. Speak with one of our identity verification and fraud experts today.
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