Every passing year, businesses make efforts to overcome fraud risks and criminals deploy more sophisticated techniques. One of the major catalysts in accelerating crimes was the COVID-19 pandemic. Since then, businesses have been striving to enhance customer experience and safeguard their services from malicious threats. However, identity theft, account takeover, payment scams, phishing, malware, money laundering, and other illicit activities still hover around businesses amid rapid digitization.
Businesses are making efforts to strengthen their remote onboarding services. This is to provide customers with a positive and secure experience may it be in terms of banking, shopping, or employment. Therefore, businesses are integrating advanced ID verification services to counter prevalent crimes. This article discusses top fraud prediction shaping enterprises’ security and how automated identity authentication blend in.
Emerging and Prevalent Fraud Trends in the Year 2022
Among industries, the finance sector is under constant threat of fraud risks. Criminals are equipped with tech tools that make bypassing traditional ID verification checks easier. Similarly, e-commerce, employment, healthcare, education, automotive, and every other sector is under the radar of severe criminal threats.
While enterprises strive to build trustworthy, long-term, and secure relationships with customers, fraudsters are all set to exploit industries’ digital operations. Considering this, businesses are integrating efficient Know Your Customer (KYC) solutions to ensure regulatory compliance. These identity verification services are capable enough to differentiate between legitimate clients and imposters before onboarding.
The emerging fraud risks drive negative consequences for both customer experience and brand integrity. On the contrary, they have some benefits because crime threats largely contribute to shaping businesses’ security landscapes. Read on to know more about the latest fraud predictions and identity verification as countermeasures.
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Existing Security Measures Will Fail to Protect Finance Offerings
Non-financial institutions face a severe backlash in terms of identity authentication, AML compliance, fraud prevention, and customer retention. They are unable to offer tailored monetary services such as access to banking records, vehicle insurance, payday loan, fuel financing, and other such assistance. As per recent statistics, the finance sector is predicted to cross the $138 billion market worth by 2026. These institutions are grasping global attention as consumers and businesses are looking to partner with them.
Non-financial firms provide easy access to financial data which aids in enhancing customer experience. Simultaneously embedded institutions are attracting cybercriminals because they involve digital onboarding, constant flow of money, instant transactions, and connection to banks. Therefore, technology companies are becoming a major target of synthetic identity fraud while criminals look forward to concealing their illicit funds. In wake of this, as the embedded market matures, ID verification plays a vital role in deterring fraud risks.
Non-financial institutions require robust identity authentication solutions to stand out in the competitive crowd. This helps keep integrity and market worth intact while limiting non-compliance risks.
Identity Theft Will Increase in the Private and Government Sectors
Governments across the globe are emphasizing the integration of digitization to facilitate users with a wide range of easy-to-access mobile or online services. They can either be banking, shopping, medical, educational, and much more. Considering this, UAE, Singapore, and Australia have launched automated identity verification initiatives. Similarly, the European Union (EU) has announced the use of digital ID by revising eIDAS.
The ease of remote access to online businesses’ services is raising other concerns predominantly identity theft. Criminals want equal benefits and commit account takeover fraud to apply for governmental benefits. Similarly, in the case of private companies, employment scams, false chargeback claims, and illicit medical applications are the most prevalent. With advanced tools at their disposal, carrying out malicious activities is no more a tiresome task.
Cryptocurrency Market is Going to Become a Safe Haven
Cryptocurrency exchanges are in a continuous state of development since their rapid adoption across the world. However, in this process, they left security, fraud prevention, and compliance behind. Due to their decentralized and unregulated nature, there is less surety of customers getting their investments back after being a victim of fraud. In 2021, crypto scams and hacks took manifolds exposing customers to a loss of around $3 billion. The prevalent fraud risks include phishing, spoofing, deepfake, and social engineering attacks.
In order to prevent emerging fraud risks, crypto exchanges need to make advanced biometric identity verification systems a part of their onboarding processes. This way, the crypto industry can stay put with KYC/AML regulations, limiting legal penalties in return. AI-powered ID verification solutions not only prevent account takeover but also restrict secret extraction.
In a Nutshell
Due to digitization, businesses will face a skyrocketing increase in fraud risks. Hence, integrating identity verification services will help companies safeguard their operations against criminal activities. Moreover, the use of digital signatures for signing contracts, authenticating transactions, and other such tasks is taking new turns. This way, advanced ID verification will enable businesses to enact fraud prevention tactics in place for deterring criminal threats.