Far from being a temporary fad, the rise of online identity fraud is here to stay, more so given the enormous volume of data available on the dark web from data leaks and cyberattacks. In this regard, it’s worth recalling that the UK currently holds the dubious honour of being just second to the U.S. in number of data breaches.
Just last year, a record 172,919 identity frauds were recorded in the UK, revealed the latest annual fraud report by Cifas. The British data sharing and prevention not-for-profit agency warned that identity fraud continues to be the number one fraud threat. Especially worrisome is the fact that the vast majority of fraudulent activities reported by Cifas happened online, with 9 out of 10 fraud instances being internet-enabled. As more consumers live their lives digitally, recorded fraud continues to increase, with criminals turning to online channels to commit fraud and launder money.
In fact, 62% of all fraudulent activities recorded by Cifas member organisations were committed online, rising to 86% for identity fraud.
The increase in identity fraud calls for secure yet convenient identity verification
Consequently, the rising level of identity fraud conducted online is already raising questions about how accounts are opened and how applicants are identified.
In this regard, the growth of identity fraud described by Cifas calls for financial institutions to not rely solely on “what you know” methods of identity verification and authentication. “We all need to make sure we protect our identity,” summarised in a recent interview Chris Greany, who acts as national co-ordinator for economic crime.
Financial institutions should be exploring all available technologies in an effort to reduce reliance on data, more so since any authentication scheme is only as secure as the process that binds the identity to the account in the first place. Passwords and knowledge-based security questions are, indeed, no longer secure as single means to authenticate a returning user. Or, in Greany’s words, “Things like weak passwords or not updating your software are the same as leaving a window or door unlocked.”
Contact us and discover user-friendly ways to strenghen your digital identity verification.