According to the Federal Trade Commission, there were 3.2 million reported cases of fraud and identity theft in 2019. Of those reported cases, there were nearly 1.7 million fraud reports that totaled $1.9 billion lost. In 2021 there were over 5.7 million reports and, of these reported cases, there were 2.8 million fraud reports that totaled more that $5.8 billion lost.
Fraudsters are not going away, which means that you must take precautions to protect your institution and its customers. Many customers subscribe to some sort of identity theft protection, however these services are not preventative in nature—they simply alert customers when something has happened. And not all consumers pay for protection or alerts, making it even more important for institutions to do their best to detect and stop fraud.
Even worse than identity theft is synthetic identity fraud, which can be much harder to detect. It’s also on the rise and accounts for greater losses. With this type of fraud, it’s financial institutions, not consumers, who are the victims. Fraudsters build a fake identity with a real credit history, allowing them to apply for and receive higher credit limits and loans, which they will never pay back. It’s estimated that this type of fraud could result in financial institutions losing up to $6 billion annually.
Once you’ve become the victim of fraud or identity theft, it takes individual consumers an average of 6 months to undo the damage. It could take even more for a financial institution to undo the damage to their reputation, which is why it’s important to prevent fraud before it occurs—to be proactive rather than reactive.
The new Panini BioCred helps prevent fraud in two ways. First, in the identity verification phase, by handling different types of identity documents, both physical or digital. High-resolution images of ID documents can be captured and sent to the chosen authentication engines to make sure the provided document is considered reliable enough to be usable for customer enrollment and new account creation; in the case of digital documents, such as the new mDL in the United States, NFC and QR Code capture capabilities can be used to read the PII included, and optionally the embedded biometric elements (photo, fingerprint) can be matched to the candidate customer's body for even greater security.
Second, BioCred will authenticate existing customers, making sure they "are who they say they are" and are therefore allowed to carry out desired transactions. Customer authentication can occur via the BioCred's patented and privacy-friendly fingerprint-based biometric system, or in more traditional ways such as card & PIN or via ID card scan and verification, as described for enrollment but with no need to collect data to populate customer profile fields.
By using BioCred in your platform-based onboarding processes and as an entry gate for teller-based transactional ones, Financial Institutions can go a long way in avoiding to become victims of fraud, and help protect their customers as well in a friendly, secure and modern way.