Data breaches which expose personally identifiable information (PII) are a growing problem in today’s high tech world. With each new protection measure fraud and security teams put in place, fraudsters seek out weak points and openings that they can target.
The PII captured from breaches is often used for both identity theft and synthetic identity creation to open or access financial accounts. Once a fraudster steals or creates an identity and is inside a financial system, they can wreck endless damage.
A key point at which financial institutions must combat identity theft and synthetic identity creation fraud is during the vulnerable point when customers open new accounts. Companies need to implement a multistep approach to decrease fraud, including the following steps:
Employ Frictionless Tools
Tools silently running in the background can detect possibly fraudulent identities early in the application process. For example, a scoring system could link a social security number with an address or phone number to help determine the likelihood that an identity is legitimate.
Use Big Data and Analytics
Companies should obtain data from numerous sources to flag behavior patterns and connections that veer from “normal” relative to the likelihood of fraud.
Mine Internal Data
Internal company databases should be used in combination with outside data to further validate a potential customer’s identity.
Work with Industry Peers
Sharing fraud-detection information with a network of similar companies will strengthen prevention measures. Fraudsters often use the same fraudulent identity again and again with different companies. Working with other companies can help detect this fraud.
Keep Current with Fraud Detection Trends
Fraudsters are continually taking advantage of new methods and technology, and businesses must stay ahead of trends in order to deter fraud. Contact us to learn more about the latest tools in fraud prevention.