Strategies to thwart digital fraud in the year 2023:
Digital Banking: Navigating the Fraudulent Wild West
In the whirlwind of digital transformation, we've embraced online banking swiftly, yet complacency can invite fraud. Identity theft, deceitful scams, phishing, and laundering schemes are some of the ways cybercriminals are lurking in the shadows of 2023. Being vigilant about safeguarding our finances has never been more critical, as these nefarious activities cost our global economy a staggering $5.4 trillion in 2021, with U.S. citizens losing $5.8 billion to identity theft alone.
Mitek leaders, championing the fight against fraudsters and identity theft, highlighted crucial guidelines for businesses to keep their clients secure and satisfied in the coming year.
Embrace the human cost
Cindy White, CMO:Remember that every scam statistic represents a person whose life has been flipped upside down by fraud. Understanding the severity of its impact on your customers helps construct a robust defense plan. According to the 2021 Aftermath Study from the Identity Theft Resource Centre, finance-related issues plague a third (32%) of victims. Send debt collectors hound them, often aggressively, and a whopping 83% face credit or loan rejection - leaving many scrambling to find housing. In extreme cases, victims may resort to criminal activities to stay afloat, further aggravating the issue. Understanding the gravity of the impact on consumers lays the groundwork for action.
Distance yourself from passwords
Mariona Campmany, Digital Identity Lead:Passwords are on their way out. Removing their reliance will become not a question of if, but when. Businesses are likely to move away from passwords in favor of new technologies like biometrics. Passwords provide little security and are a hassle for users, who rely on them to access their online accounts and identity verification. Even one-time passwords as part of multi-factor authentication can be compromised with the help of scammers.
The rise of biometrics
Stephen Ritter, CTO:Passwordless authentication inspired by multi-modal biometrics is the secure, user-friendly solution. Biometrics offer higher levels of security compared to passwords and improve the user experience. Forged identity documents and synthetic identities are growing concerns, but it's challenging to steal a verifiable biometric that meets industry standards. Multi-modal biometrics are more secure than other identification methods available in the market today.
Transparency is key
Chris Briggs, Head of Digital Identity:To make biometrics adoption comfortable, organizations must provide complete data transparency. Users need to be able to understand what information is collected, how it's used, and how they can revoke consent. Mitek's recent Reddit AMA taught us that consumers lack trust in the government, businesses, AI, or even friends when it comes to the appropriate use of biometrics. To bridge this trust and confidence gap, businesses must help consumers understand their rights – especially those that come from emerging personal information and biometric regulations like the AI Bill of Rights.
Expand consumer awareness
Steve Ritter, CTO:Consumers need to understand that biometric authentication does not mean biometric surveillance. Businesses must educate consumers about the differences. As the first line of defense against digital fraud, businesses must protect customers through biometric-based authentication solutions.
By creating a seamless, safe, easy-to-understand, and well-protected biometric system, consumers will be more likely to adopt biometrics as a convenient and secure alternative to passwords. To boost security, businesses should also share tips for protecting online information and identity. For example, strong passwords, secure home networks, and cautious email browsing can help protect users from scams.
Recognize fraudulent schemes
Sanjay Gupta, SVP and MANAGING DIRECTOR:Businesses need to inform consumers about fraudulent schemes that could threaten their identity and data. For instance, voice phishing scams, account takeovers, and other attacks can be avoided through proper education. If a business uses voice biometrics, consumers can thwart these schemes. Remember that fraudsters always find ways to abuse new technologies. Businesses should stay prepared by continuously innovating and sharing knowledge at events like MiSummit.
Consider adopting advanced identity verification methods, AI-driven fraud detection, combatting voice cloning scams, using the Digital Fraud Defender, exploring reusable digital IDs, maintaining data privacy, using explainable models, and collaborating with other industry leaders to stay one step ahead of cybercriminals in the digital banking landscape. Keep educating and protecting your customers to safeguard their digital identity.
Check out the new Gartner report, Market Guide for Identity Verification, for more insights on digital identity and fraud prevention.
Gartner report: Market Guide for Identity Verification
- In the fight against fraud in digital banking, the implementation of advanced biometric authentication methods, such as facial recognition and digital identity verification powered by AI, can significantly enhance security.
- To maintain data privacy and ensure transparency in biometric authentication, businesses must provide complete data transparency to users, allowing them to understand what information is collected, how it's used, and how they can revoke consent.
