Identity theft in banking and how to avoid it
Improving customer experience and retention by reducing account takeover should be the goal of every financial services provider. Strong identity verification bound to strong authentication protects your customer’s data, gives assurances around customer authenticity when interacting and helps eliminate account takeovers. Solutions such as LoginID help financial institutions, banks and card issues to integrate strong authentication and identity verification.
Identity theft is a growing concern in the United States; in fact, the number of reported identity theft cases rose from 650,000 reports in 2019 to 1,388,000 in 2020, a rise of more than 113%.
Some common types of identity fraud are government document fraud, health or government benefits fraud, credit card fraud, loan and lease fraud, employment or tax-related fraud, phone or utilities fraud, and bank fraud, among others.
While many reported identity theft cases involve the misuse of someone’s credit card, account takeovers via identity spoofing is a more serious concern with deeper implications.
Identity theft creates a bad reputation for financial institutions, banks and card issuers, with implications stretching beyond financial losses, to mistrust from consumers. Financial institutions, banks and card issuers can mitigate this risk by enabling their own digital verification and identity management with secure identity solutions.
The best in class digital onboarding solutions perform user identity verification by digitally scanning their ID, performing liveness detection, and biometric matching of the user to their ID to prove that the user is who they say they are. Online automatic identity verification solutions can also enable secure account recovery without human intervention, thereby reducing the cost and time involved in helping users recover their accounts.
Tech giants such as Apple are coming up with solutions for identity verification, by allowing users to store ID cards such as their driving licence on their mobile devices. However, the risk for financial institutions, banks and card issuers is the loss of a direct to consumer relationship, by handing this function over to a big-tech player.
To reduce risk of account takeover, financial institutions, banks and card issuers need to ensure a strong binding of identity and authentication, i.e. allowing the user to securely verify themselves even if their primary device is lost. Solution such as FIDO binding provide the additional level of trust that users and banks need to eliminate the risk of account takeovers or phishing.
FIDO Authentication is the de-facto authentication standard that has been proven to offer protection against account takeovers from phishing and other such credential-based attacks. If a user ends up losing their primary FIDO authentication device or if the device gets stolen, then recovering access to the FIDO-protected account can still be done with a high level of assurance. FIDO binding has additional use cases such as in the account onboarding processes, as it helps the organization meet Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
How LoginID helps
LoginID’s FIDO/FIDO2 multi-factor authentication solution is highly secure, simple to integrate and reduces onboarding friction. It enables financial institutions, banks and card issuers to offer their clients strong authentication and identity verification across desktop and mobile.
Furthermore, it is compliant with regulations such as the GDPR and the PSD2.
With LoginID, financial institutions, banks and card issuers get:
A FIDO2 / FIDO UAF certified biometric authentication and identity verification solution