Adam Elliott, ID Insight founder, wrote an article for ABA Risk and Compliance called, “New Account Fraud Creates Friction for Banks.”
Losses from fraudulent new accounts jumped from $3 billion in 2017 to $3.4 billion in 2018, according to Javelin. One of the reasons is that many banks are not using technology to screen for out-of-pattern behaviors that only become evident when combining identity attributes with other data elements, including otherwise hidden insights from phones, addresses and emails.
Fraudsters are using massive data sets and cutting-edge technology to update their schemes in the digital space, Adam says. To prevent reputational damage and catastrophic losses, banks must build their own powerful arsenal of tools to detect attacks early.