COCC Insights Final - Flipbook - Page 2
K EY
EY M
E TR
T R IICS
CS
ME
DIGITAL IDENTITY
INSIGHTS
38%
38% of digital banking users log
in with more than one device, with
the majority opting for mobile.
Source: COCC
Staying Ahead of Fraudsters
Criminals are becoming more sophisticated in the ways they trick
customers into giving up account information and money. To fight this,
institutions must deploy an array of tools to verify the real identity of
account holders.
K E Y TA K E A W AY S
• Financial institutions must
protect their customers and
organizations as fraudsters
continue to evolve their tactics.
• Stolen or constructed identities
are used to perpetuate several
forms of fraud, including
account takeover, authorized
push payment fraud and
synthetic identity fraud.
• Automation, machine learning
and artificial intelligence can be
leveraged to better assess the
data points used to triangulate
a customer’s identity.
• More innovative institutions
incorporate multiple data points
and solutions during customer
onboarding.
2
In December 2024, the FBI warned
Americans of the potential for scammers
to use generative artificial intelligence to
perpetuate large-scale fraud. “Criminals
use AI-generated text to appear believable to a reader in furtherance of social
engineering, spear phishing, and financial
fraud schemes,” the alert said.
As fraudsters evolve their tactics, generative AI’s ability to create text, images and
video will make it easier for customers to
get tricked — and for criminals to bypass a
financial institution’s protections.
A November 2022 report from the
consultant Oliver Wyman and the American
Bankers Association, “The Growing Significance of Trusted Digital Identities in U.S.
Financial Services,” noted three areas where
weaknesses in identity verification can lead
to problems for a bank: verifying an identity
when onboarding a new customer, authentication — when a customer logs into their
mobile banking app, for instance — and
transaction authorization and monitoring.
Institutions need to determine that a customer or prospective client is who they say
$3,000
to $4,000
Average loss per account tied to
synthetic identity fraud.
Source: Fiverity
they are, and whether the person is a bad
actor. That’s especially challenging in digital
channels. But institutions increasingly rely
on numerous data points and behaviors to
make those confirmations — and will need
to continue to tweak those processes to
stay ahead of fraudsters while providing a
smooth experience for real customers.
Mike Grisevich, assistant vice president of
digital banking solutions at COCC, explains
that onboarding can merely serve as a fraudster’s foot in the door. “The real risk emerges
30 or 60 days after onboarding, when some
users assume the institution is no longer
monitoring activity,” he says. “They’ll start
to test the waters out and experiment with
suspicious or harmful behaviors.”
Rising Fraud Concerns
Several types of fraud use stolen or constructed identities. For instance, a criminal
can trick a customer into providing access
to an account, leading to an account takeover. Or a scammer may use social engineering to convince a victim to send a payment
to a fraudulent account.
