Deploying Financial Security against Synthetic Identity Frauds

Deploying Financial Security against Synthetic Identity Frauds

By CFO Tech Outlook | Wednesday, July 17, 2019

Awareness is the first step, and preventive measures are the next to meet the big new challenge called Synthetic Identity Fraud.

FREMONT, CA: While the financial sector seemed to have found ways of minimizing security challenges from fraudsters and hackers, a new challenge in the form of Synthetic Identity Fraud (SIF) has now emerged. In this approach, fraudsters combine fake and real data to create new identities that seem to belong to legitimate customers. What makes SIF particularly dangerous is the fact that these are difficult to detect. In order to deal with this newfound risk, financial firms first understand how this method works and subsequently devise ways of mitigating it.

With valid Social Security Numbers (SSNs), a fraudster may combine fabricated credentials and make the identity seem valid. A particular characteristic of SIFs is that they don't have specific consumer victims. The lack of victims means, there won't be an alert from any of the customers regarding the fraud. Also, there is an absence of evidence against malicious activities.  

Check out: Top Retail Banking Solution Companies

To prevent SIFs, banks have got to do away with traditional and simplistic identity verification methods which are not sufficient in detecting fake profiles. A comprehensive check that takes into consideration various and randomly selected attributes of a customer can prove to be a significant step. Next-generation technologies to carry out relational analysis of an individual’s data can add many layers to identity verification. Cross-referencing of fraud information through dedicated platforms can expand the resources which provide insights to banks.

The best way to catch SIFs is by detecting inconsistencies. Multi-layered authentication can enable companies to detect inconsistencies. Many of the users in the current date are mobile users. By integrating the onboarding process by creating links between critical information, banks can create databases. Correlating the data from the enriched database with real-time data, like the location, provides better intelligence. Apart from this, regulations specifically meant for handling SIFs better can come in handy for banks.

Quick response and strict verification standards can empower banks to dodge the SIF threat successfully.

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