Digital Bank Onboarding Fraud Detection Case Study

As banks evolve to compete in a digital-only world, their top priority is how to gain market share as fast as possible by offering special incentives and making the onboarding process as easy as possible. However, by definition, opening a bank account online is an intricate process, but streamlining it and making it as user friendly as possible, is the key to success.

Starting in 2017, this new digital bank in the U.S. allowed users to complete the account opening process entirely online, offering high interest rates on savings and Certificate of Deposit (CD) accounts to entice new customers. Identity verification involved traditional KYC personal data checks, device ID, email address validation and geolocation checks. In addition, a final step to validating user identity involved sending a small amount of money to the account that the user indicated they would be transferring money from, and then asking the user to report on the amount transferred. The idea was that this step would demonstrate that it was the legitimate user as they had control over the funding account.

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