Fraud looks a bit like the weather: Everybodys talking about it, but no one seems to be doing much about it. Or is it? If youre a regulated financial services provider, especially in the online and mobile space, then read this carefully.
Lets take the UK example. According to the latest report of CIFAS, UKs fraud prevention agency, 53% of all frauds were identity fraud (actually the numbers are likely closer to 85% according to other statistics), identify fraud cases committed online increased +57% (they increase YoY) and only 3.4% of all identity frauds involved fictitious identities. Let me make it clearer: 96.6% of all identity fraud involved genuine identities! Not fictitious ones. How come?
Well, if you read the 19 August 2016 InformationWeek report you may have noticed that “Personal Info kits are available on Darknet at as low as 25 cents a piece and the “Ultimate Fraud Package – 6500 items - 2016 + FREE GIFT!” containing eBooks, tutorials, guides about Bitcoin, PayPal, Bank Transfers, Hacker Tutorials, Carding, Fraud, Cashout Tutorials, Anarchist Handbook.” – all offered at a mere USD 9.99. This genuine data set is submitted to you on account origination. Being genuine data, it checks obviously positive with your identity verification service. Bingo! The fraudster is in and let the party begin!
But the latest technology paradigm (already in deployment by some of the worlds biggest players) can help curb this threat. It does it by checking not just the data, but also where that data comes from.
According to KYC regulations, customer identity must be checked using a government issued face ID facility: ID card, drivers licence, passport etc. To pass the data onto you, a fraudster must either plant that data in an ID document image or produce an altogether new ID image using a template and an image editor such as Photoshop. Be advised that only 2nd generation ID authentication technology can actually check an online submitted ID document image for manipulation or counterfeiting at a forensic level. It takes an average of 10 seconds per image to carry out a complete process of ID recognition, workability screening, content extraction and multi-factor authentication. Key point is that it is not enough to look at the data but also at the source of that data. The ID image which the regulators mandates you take that data from. Make sure your customer onboarding solution includes 2nd generation ID authentication and onboarding technology.
About Ofer Friedman
VP Marketing of AU10TIX, the forerunners of 2nd generation ID authentication and onboarding technology. A make-happen international BizDev and marketing guy with a tendency to become an authority in what he does. In recent years specializing in technology after a long career in consumer markets and roots in strategy leadership roles at BBDO and Publicis. Sizable milage working with global majors, seasoned with startup work and established business turn-arounds. Authored book and articles and an enthusiast speaker. M.Sc. in Management and OB, specializing in persuasion and preference generation. Lived and worked 10 years in Germany. An Einstein fan whos also inspired by Jules Verne, Steve Jobs, B.H. Liddell-Hart and Groucho Marx.
About AU10TIX
AU10TIX is the forerunner of 2nd generation ID authentication and onboarding technology. The companys technology powers global majors such as Paypal, Goolge and Payoneer. AU10TIXs portfolio also includes augment customer authentication and screening services such as mobile SDK, Selfie-to-ID face comparison, restriction list screening, etc. AU10TIX solutions have demonstrated their ability to improve customer conversion success rates, increase effective traffic handling capacity, boost operating efficiency and improve the robustness of regulatory compliance. AU10TIX is a subsidiary of ICTS International N.V, one of the worlds leading airport security companies for almost 30 years.
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