Onboarding new customers while accurately unmasking new account fraud

In an effort to meet consumer demand for convenience and ease-of-use, businesses are continuing to shift their procedures and practices from in-person to online. At the same time data breaches persist, setting record highs each year and compromising the personally identifiable information (PII) of millions of individuals. In today’s digital-first world, cybercriminals have everything they need to create complete and convincing profiles capable of bypassing the traditional fraud detection solutions still used by many businesses.

While stolen identity fraud has existed for some time, the transition to digital channels has elevated identity fraud to a whole new level in terms of size and scope. Identities are now the new currency. Unlike stolen payment credentials, which can be rendered useless once a victim suspects foul play, full profile identity data has lasting value for fraudsters. Securely concealed behind the Internet, fraudsters can use stolen or fake credentials to apply for new credit, loan, bank, utilities, and other accounts – and they can apply for them en masse before “busting out” and leaving credit and lending companies liable for massive losses.

Synthetic identities, identities for which fraudsters combine real and fake information to create brand new identities, have contributed significantly to the rise in new account fraud. By offering fraudsters the potential for higher payouts with lower effort and risk, synthetic identity fraud is fast becoming a challenge for financial institutions who are sent down a rabbit hole while attempting to collect on debts that were taken on by people who never existed.

As more accounts are established through digital channels, financial institutions need a reliable and accurate method to verify that an applicant not only provides authentic information, but that he or she actually exists. In addition, businesses are managing multiple competing priorities when onboarding new customers as they not only attempt to deal with fraudulent applications, but also increasing regulations such as KYC, reducing friction, and adapting to change.

Building a layered defense is the key to balancing multiple priorities while accurately identifying and blocking account applications using stolen and synthetic identity credentials. Failure to protect the point of entry will result in increased financial loss, operational costs, and reputational damage later on down the line. Legacy solutions are unable to keep up with ever-evolving, sophisticated fraud based on real identity information. However, by combining various static and dynamic data sources with powerful machine learning, organizations can obtain actionable insights to protect themselves from evolving fraud, while providing a frictionless experience for legitimate customers.

Simility offers an end-to-end fraud and decisioning platform built with a data-first approach to provide a 360-degree view of the end user, designed to protect the customer journey. Simility’s Adaptive Decisioning Platform incorporates dedicated services to help organizations detect new account application fraud and uncover the use of stolen and synthetic identities. By using a layered approach, which includes multiple static and dynamic data sources such as digital intelligence, historical data, blacklists, credit reporting agency data, and third-party data to triangulate anomalies, combined with automated link analysis and advanced machine learning, financial institutions can better detect and understand emerging fraud patterns in real time before they become a problem. In addition, Simility can help financial institutions reduce friction during the onboarding process and protect their ecosystem, thereby helping to improve acceptance rates.

For more information on how Simility can help financial institutions combat new account fraud, download the white paper here.

 About Vanita Pandey

Vanita is the Senior Director for product strategy and marketing at Simility. In this role she is responsible for establishing Similitys brand, driving Similtys go-to-market strategy as well as product and market positioning. Prior to Simility, Vanita worked at ThreatMetrix where she was responsible for the strategic vision and go-to-market for ThreatMetrix products and solutions. With extensive experience in strategy, innovation, product management and analytics within the payment industry, Vanita previously led merchant development and global go-to-market for Visa’s digital products. Prior to Visa, Vanita held a range of diverse positions at some of the world’s leading financial institutions including Capital One, Standard Chartered Bank and ABN AMRO Bank.

About Simility, a PayPal service

Simility, a PayPal service, offers real-time risk and fraud decisioning solutions to help protect global businesses. Simility’s offerings are underpinned by the Adaptive Decisioning Platform built with a data-first approach designed to deliver continuous risk assurance. By combining artificial intelligence and big-data analytics, Simility helps businesses orchestrate complex decisions to reduce friction, improve trust, and solve complex fraud problems.