Gear up. The 2019 holiday shopping season is upon us, and with it a sharp increase in online fraud. According to Arkose Labs, fraud increased by 30% in Q3 2019, a preliminary of what’s to come as criminals test stolen credentials to pave the way to successful scamming.
Social engineering is one of the largest threats to an organization’s cybersecurity — and scammers are only getting more clever and sophisticated in their attack methods. According to Proofpoint, in the third quarter of 2019, URL-based email threats comprised 88% of overall malicious messages. And although email remains a top method of attack, phone-based social engineering scams are among the fastest growing types of threats.In the United States, the Federal Trade Commission reported that 77% of its fraud complaints involve contacts by telephone, of which social engineering is a subset.
New account fraud is one of the largest and most dangerous threats that businesses face when processing transactions online. According to an analyst from Javelin Strategy & Research, it’s the “most expensive form of identity fraud for businesses and consumers alike.”
In 2018 alone, new account fraud caused $3.4 billion in losses, an increase over previous years. The steady leak of personally identifiable information (PII) is largely responsible for the upward trend. The amount of PII exposed in data breaches — such as social security numbers, emails, addresses, phone numbers and device and network attribute — grew by 126 percent between 2017-2018. Hackers use the information to forge stolen identities and open fraudulent new accounts.
Why is new account fraud spiraling out of control? Because you can’t teach an old dog new tricks.
Out with the Old
Traditional methods for fraud detection and the safeguarding of digital identities are outdated and lacking. Advanced fraudsters are constantly finding new ways to steal identities or create synthetic ones, handedly sliding past these systems of defense.
Today’s detection tools also cause friction in the account opening process. And as any organization knows, friction is the number one reason customers will walk away from doing business with your brand. Online transactions should be seamless, not full of frustrating roadblocks to opening an account.
In with the New
The missing piece to the puzzle is behavioral biometrics. Powered by artificial intelligence and machine learning, behavioral biometrics works behind the scenes to monitor a user’s online behavior. By analyzing thousands of behavioral patterns specific to how a user acts during an online session, the technology can verify that the individual opening an online account is legitimate, and not a fraudster. Users are kept secure without having to take additional steps. It’s a seamless process.
In this infographic, we highlight the most alarming new account fraud trends and statistics, explain why traditional fraud detection methods fall short and examine how BioCatch’s behavioral biometrics technology closes the gaps.
As the insurance industry continues to digitize, companies are facing new threats from cybercriminals looking to make a profit by stealing insurance benefits or entitlements. Insurance fraud adds up to $40 billion in losses per year, costing the average American family $400-$700 in increased premiums, the FBI reports.
The sharp increase makes it clear that traditional methods of insurance fraud prevention are no longer effective. Passwords and two-factor authentication are unable to stop criminals, who are submitting fraudulent applications by using stolen or synthetic identities, taking over legitimate accounts to make false claims, or changing payee information to divert insurance funds.
We now live in the age of cybercrime, and insurance companies need authentication and detection solutions that can spot and stop fraud in real-time.
New account fraud, also known as application fraud, is rapidly outpacing other forms of cybercrime, making it one of the largest concerns for companies offering digital account openings.
From banking trojans to social engineering scams, online and mobile banking channels are vulnerable to an ever-growing range of cyberattacks. To keep up, retail and commercial banks need online banking security measures that criminals can’t circumvent.