Today, business starts and grows digital. The pandemic has accelerated this process, pushing online services to evolve to digital onboarding procedures instead of traditional, face-to-face ones. Fraudsters are always moving in the same direction, resulting in a significant increase in New Account Fraud (also known as New Account Opening Fraud).
The security issues related to the onboarding process transversely concern Financial Services, eCommerce, and PA. Therefore, it is necessary to allow digitized access to the service while recognizing fake or fraudulent users in this context.
New Account Fraud is a form of identity fraud that involves a fraudster creating a new account in a service or product using stolen or synthetic identities. This type of fraud is often the consequence of previously accomplished data breaches that provide attackers with massive personal information data sets that are then used to forge synthetic identities or impersonate somebody else.
It’s not only a financial-related threat. Usual targets are bank accounts, credit or debit cards, and loans. But fraudsters also target public administrations to hijack tax refunds, pension funds, or e-commerce loyalty programs.
The digital onboarding procedures focus on gaining as many new users as possible. Pursuing this goal often means preferring user experience over security during solution development. An easy and enjoyable onboarding experience is sure to attract new users, but balancing it with identity checks is a must unless you want your service to be affected by fraud. Here is why New Account fraud imposes new challenges and requires new approaches to detection and protection. The financial institutions should let convergence traditional fraud monitoring with AML instruments. Preventing New Account Fraud requires a holistic approach that considers several factors, such as user information, biometric behavior, and device fingerprints.