Financial institutions regularly use device identity for fraud prevention and to authenticate users at login. It is one of many controls that can be used to safeguard online interactions. But as with other security tools that rely on static measures, cybercriminals are finding ways to circumvent device ID. Taking over user accounts is one of the largest tactics, and in 2019 alone, account takeover fraud cost U.S. businesses nearly $7 billion in losses. Secondly, financial institutions are experiencing significant rates of fraud in the account opening process and have difficulty accurately separating genuine applicants from cybercriminals. Because new customers have never been seen before, their devices haven’t either, making device identity unhelpful for account opening protection.
Consumer demand for more digital products and services is the driving force behind the rapid digital transformation for many financial institutions. This is especially true for account opening, with 37% of consumers, and more than half of millennials, citing digital channels as their preference for opening a new account.
Behavioral biometrics has evolved profoundly in the last decade. What started as the analysis of user behavior based on clicks, swipes and typing patterns has developed into a technology that relies on deep knowledge of neuroscience and cognitive analysis that ventures into the unchartered areas of the human mind.
The gig economy has exploded, especially in the wake of the COVID-19 pandemic. According to the Bureau of Labor projections, the portion of gig economy workers will increase to 43% in 2020. Among millennials, 40% have identified as participating in the gig economy.
Improving cyber security ROI while managing risk and providing a seamless customer experience is a balancing act. With the number of hackers and criminal groups targeting financial institutions at unprecedented levels during the pandemic, strong fraud detection solutions are more important than ever.
Mule accounts are the most critical link in the fraud supply chain infrastructure. After all, cybercriminals can’t steal money if they have nowhere to send it. According to Europol, more than 90% of all money mule transactions are directly linked to cybercrime.