While businesses across industries faced unprecedented challenges in 2020, data shows that fraud rates reached all-time highs, with identity fraud attempts surging by 15% compared to 2019.
Covid-19 has not only ravaged public health and the global economy, but has also opened new windows of opportunity for fraudsters to strike. In April, as countries around the world implemented lockdown measures, Fourthline observed a 37% year-over-year increase in fraudulent account creation attempts, followed by a 42% increase in May—accounting for the top two months for fraud in 2020.
Regulated institutions experienced what Javelin Strategy & Research identifies as a shift in the tactics of cybercriminals, who increasingly prioritized fraudulent account openings and takeovers over credit card fraud. Krista Tedder, Head of Fraud at Javelin, confirms: “The full weight of identity fraud lies not only in counterfeit credit cards and magnetic stripes but in full account takeover and new account fraud.”
In order to address the rising focus on targeting new and existing accounts, regulated institutions must adopt modern protective practices that detect and deter fraudsters before they’ve found a way into the system. Fourthline saw counterfeit documentation emerge as the most popular form of identity fraud in 2020, which begs the question: what is the most effective way for regulated institutions to prevent against these attacks in an ever-changing landscape?
Outsourcing Know Your Customer (KYC) processes to the right partner is potentially the safest approach to bolstering fraud prevention. With deeper data checks, smarter technology, and broader coverage of official documents, databases, fraudulent behavior patterns and the like, implementing advanced KYC technology is most efficient and effective way to protect against fraud. Learn how Fourthline’s KYC offering can help you meet compliance requirements and protect your business in 2021.