More Fraud in the Future? You Can Bank on It.
Account origination fraud is an increasing problem these days. Banks lose billions of dollars each year to thieves who use stolen personal information to create new accounts and commit fraud. Recently, Neustar commissioned new research conducted by SourceMedia of over 200 senior-level financial executives with involvement in their company’s fraud prevention and risk mitigation processes. The research found that account origination fraud is a top priority for financial executives, many of whom believe the threat will grow significantly over the next five years.
Key findings from the research include:
- 1 in 5 respondents report losses of over $2 million due to account origination fraud
- Responding to an account origination fraud attack takes 24 hours on average, with 1 in 4 respondents requiring 3 days to address the attack
- 41% believe that preventing account fraud origination has a higher priority than other fraud initiatives
In the fight against fraud, financial institutions recognize the need for better processes. Consumer education is a key component of any fraud prevention program, but financial institutions also need to have better tools and enterprise-wide integration to succeed against scammers. Many of the account origination methods used today by financial institutions have changed little over the years; name and address are still the chief means for account verification, and government-issued IDs (e.g., social security numbers) remain the most common form of data verification when opening a new account.
With the rise of account origination fraud on the horizon, financial institutions need to take a stronger approach to fraud mitigation using next-generation technologies. At Neustar, we’ve developed solutions that build on current best practices to deliver enhanced fraud prevention capabilities that include:
- Linking user identities and devices to authoritative offline identity information
- Flagging risk factors around particular identity attributes (e.g., phone, email, IP address)
- Automatically matching trusted ID attributes (name, address, email, phone) with user-submitted information
In the next 12 to 18 months, financial services companies will be looking at new ways to combat account origination fraud. If you’d like to hear how your peers are prioritizing their fraud spending, addressing new mobile and online threats, meeting compliance requirements and strengthening their security, tune in for a free webinar on Thursday, October 13th at 2:00 PM hosted by Neustar and American Banker, titled “Account Origination Fraud Prevention and Solutions.” The webinar will feature speakers from Neustar and SourceMedia as they reveal the results of their financial executive survey and discuss the next-generation fraud solutions available on the market today.
To register for the webinar, click here.