As the banking industry continues to move toward digitized customer onboarding, bad actors are expected to exploit these processes to create fraudulent accounts for financial abuse. New account fraud is particularly dangerous because it doesn’t impact a bank’s credit history and is difficult to detect.

Criminals commit to Preventing New Account Fraud by stealing or creating fake identity information and exploiting a bank’s onboarding process. The goal is to acquire a credit card, which can then be used to make purchases for resale and other purposes. The fraudster will usually spend the most money in the account’s first 90 days and then disappear – but they’ll leave behind a trail of evidence, including chargeback requests that are filed by the issuing bank.

Preventing New Account Fraud: Proactive Measures for Financial Institutions

It’s challenging for banks to combat new account fraud because they don’t want to impose obstacles that would turn away legitimate customers. In addition, it’s often difficult to verify identities at the account opening stage because there’s no baseline of “normal” behavior.

To combat this type of fraud, iProov’s technology can bring national-grade security to the onboarding and authentication processes without disrupting the digital experience for genuine customers. This can include verification methods such as velocity checking, which examines how quickly the account is accessed to identify a pattern of suspicious behavior. It also includes methods like biometric verification, which can help verify a user’s identity with a physical characteristic they are unlikely to fake or conceal, such as a fingerprint.

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