A new report announced by the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) reveals the urgency of banks and financial institutions implementing more advanced digital identity verification and authentication.
The FinCEN Identity Project, which analyzed millions of suspicious activity reports (or SARs) from banks and other financial institutions, found that of the 3.8 million reports analyzed, 42%, or $212 billion worth, were related to identity.
Mary Ann Miller, Fraud & Cybercrime Advisor and VP of Client Experience at Prove who was in attendance at the forum when the findings were announced, did not find the connection between identity and financial fraud surprising. Public sector fraud cases “increased the attack rate of account opening attempts with identity theft and synthetic fraud on the banking side,” Miller told Biometric Update.
“To get financial services right, we need to get identity right,” said Kay Turner, FinCEN’s chief digital identity advisor about the results of the project, which were recently revealed at the AFCEA Federal Identity Forum & Expo in Virginia.
“To get financial services right, we need to get identity right,” said Kay Turner, FinCEN’s chief digital identity advisor.
“The FinCEN Identity Project results show that we are now at a critical level when it comes to banks and financial institutions identity proofing at account opening and authenticating identity during transactions. The bottom line is that FinCEN's suspicious activity report (SAR) data is the banks telling the regulators "we have an identity problem” through a set of quantitative data,” said Miller.
“The bottom line is that FinCEN's suspicious activity report (SAR) data is the banks telling the regulators ‘we have an identity problem’ through a set of quantitative data,” said Miller.
“I think hearing what [Turner] just shared ... proves that this is something that goes beyond just government services issues,” Jeremy Grant, head of the identity policy group the Better Identity Coalition told NextGov/FCW.
“Gaps and breakdowns” in identity processes are “[enabling] illicit finance to occur through financial institutions,” said Turner, and added that FinCEN is looking into ways to use the data to inform policies and shine a light on technologies that help mitigate identity fraud.
“With such telling data staring us in the face now, our ability to adapt to new threats and technologies bad actors use has never been more critical,” said Miller. “New processes must be put in place to protect the integrity of customers, and across public and private sectors, digital identity must be positioned as a building block for more reliable financial services. Getting digital identity right is the first step, which involves implementing solutions that enhance privacy and security."
One solution many banks and financial institutions have been turning to in order to address identity fraud is to implement identity-proofing technology such as Prove's identity verification and authentication platform. Prove is able to establish that a customer is in possession of the expected device, that the reputation of the device is trusted, and the asserted identity is associated with the phone. “That real-time process ensures the consumer is presenting their own information and is a critical process to modernize digital identity,” says Miller.
If you are a financial institution looking to strengthen your digital identity verification and authentication to better protect your customers against identity fraud, contact us to speak with an expert.
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