Account Origination Fraud Detection

Account origination fraud detection is a critical task for any financial organization. New account fraud occurs when someone creates an account with a false identity and uses it for fraudulent activities. This type of fraud can occur on a small scale or on a large scale. While it may not be easy to detect, it can have a damaging impact on organizations and their customers.

Several methods exist for detecting new account fraud. Traditional methods involve using authentication to confirm the identity of a user. However, this strategy does not stop more sophisticated attacks. Many criminals use automation tools to generate fake accounts.

Some financial organizations are investing in identity verification solutions to prevent these attacks. One such company is Neuro-ID. The company’s Friction Index Platform can help organizations identify authentic customers and improve theĀ account origination fraud detection customer experience. In addition, its biometric verification system can prevent the creation of fake identities for new account fraud.

Behavioral analytics technology can also be used to help detect fraud. These tools help businesses read the digital body language of the customer to identify fraudulent behaviors. It also provides a more reliable method of detecting threats than traditional fraud detection systems.

Behavioral analysis is particularly effective in combating new account fraud. Financial organizations have identified this as a top risk for the future. According to an American Banker/Neustar survey, almost two-thirds of respondents indicated that this form of fraud was a serious threat today. Meanwhile, one-third of senior executives believe that the threat will become more severe in the next five years.

Cybercriminals are constantly developing new ways to get into businesses. Most recently, the fraud rings have switched from automated attacks to human workers. Because they have access to stolen consumer information, these ring members are able to create synthetic identities and generate accounts for fraud purposes.

As online services continue to evolve, the number of fraud attacks has increased. Companies need to implement fraud detection solutions across their enterprises. The solution should include the ability to avoid inconsistencies and security “loopholes”. Other factors to consider include the cost of fraud and the impact of fraud on productivity.

Account origination fraud is a growing cyber risk worldwide. It is estimated to cost billions of dollars every year. Yet, despite the increasing numbers of frauds, many companies are unsure how to address them. A recent study from Neustar reveals that financial organizations spend 76 hours from investigation to customer communication. Additionally, organizations that are negatively affected by fraud tend to see the risk of account origination fraud as more severe in the future.

Although the financial industry is constantly looking for new ways to secure their customers, the threat of fraud is not going away. Fraudulent credits are usually irretrievable when a fraud is discovered. Detecting these attacks sooner rather than later is important to ensure that a company does not suffer from significant losses.

To help prevent new account fraud, financial organizations should implement a comprehensive fraud detection solution that can mitigate the risks of fraud and error. Among the most effective fraud prevention solutions are ones that can verify the identity of a customer and prevent security loopholes.