As uncertainty persists due to the COVID-19 pandemic, the war in Ukraine, international cyberthreats, inflation and a looming recession, it is clear that the world has entered a new era of risk. These factors have created the perfect storm for rising fraud. In the past year, unauthorized digital account openings increased by 21%, while smartphone-related cyberattacks soared by 71%, reflecting a changing threat landscape impacting enterprises and consumers alike.1, 2
According to one global survey, nearly half of all respondents experienced fraud in the past 24 months,3 compromising financial resources, personal data and peace of mind with frightening rapidity. As a result, identity verification is a priority for organizations and government agencies that view it as a strategic differentiator that allows them to enhance the customer experience while improving their defensive posture at a critical time.
This new era of risk presents a fresh opportunity to tackle fraud with vigor. There are 3 ways for leaders to protect their business and customers in 2022 and beyond.
Know the Customer
Many consumers are on edge after a pandemic year introduced a cadre of new online security challenges. A consumer study found that nearly two-thirds of US citizens are “very or extremely concerned” about cybersecurity breaches and ransomware attacks. At the same time, less than half of US citizens believe they have the knowledge and tools to protect themselves from a cyberattack or fraud attempt.4
In other words, people have a heightened awareness of today’s threat trends. However, they do not inherently trust enterprises to respect or protect their personal information. An industry survey found that more than three-quarters of respondents are “very concerned about online privacy,”5 creating a unique challenge for organizations that rely on data collection and analysis to guard against fraud.
People do not inherently trust enterprises to respect or protect their personal information.To contend with customers who are concerned about cyberrisk and fraud but unwilling to part with privacy to protect their online accounts, enterprises must adopt identity verification and fraud prevention initiatives that minimize data collection and transition, providing peace of mind and unparalleled protection for today’s online users.
Take a Customized Approach
Online platforms are becoming more popular and complicated each year, making fraud detection and prevention similarly complex. That is why organizations need a customized approach to identity verification that addresses immediate vulnerabilities and offers scalable solutions to address emerging challenges.
Most prominently, this means relying on an identity verification standards that minimizes data collection by relying on prequalification formats and novel technologies, such as machine learning (ML), to assess a customer’s authenticity. For example, these technologies can evaluate readily available and noninvasive information (e.g., IP addresses, phone numbers, email addresses) to verify identities.
When coupled with human expertise, identity verification workflows can effectively guard against fraud. Simply put, when enterprises are equipped with a customized identity verification workflow, they are best positioned to detect and deter fraud in a high-stakes digital environment.
Remain Agile
Online fraud undermines the promise and potential of today’s digital platforms. As organizations respond to today’s threats, they must keep an eye on tomorrow’s challenges, remaining agile in the face of a constantly evolving threat landscape.
Specifically, enterprises should continue to assess the risk associated with mobile platforms. As customers become more reliant on smartphones for everything from health care services to ecommerce, mobile devices become a top target for fraudsters. It is clear that organizations must implement fraud prevention measures that keep people safe across all their devices.
Of course, shifting regulatory standards and customer expectations will continue to keep enterprises on their toes, requiring greater levels of transparency when it comes to data collection policies and justifications.
In short, identity verification must be an evolving practice that continually adapts to the latest cybersecurity risk sources, regulatory standards and operational realities.
Conclusion
As enterprises adjust their commitment to protecting customers from fraud in this new era of risk, the right identity verification solution can be a competitive differentiator. In a time of unique uncertainty, identity verification solutions offer a measure of trust, security and reliability as organizations and their customers navigate the shifting digital landscape.
Endnotes
1 IDology, Fourth Annual Consumer Digital Identity Study, USA, 2021
2 Ibid.
3 PricewaterhouseCoopers, Global Economic Crime and Fraud Survey 2022, United Kingdom, 2022
4 Op cit IDology
5 Security, 75% of Americans Very Concerned About Online Privacy, But Most Don't Take Any Significant Action,” 10 February 2021
Editor’s Note
Hear more about what the author has to say on this topic by listening to the “Protecting Your Enterprise and Deterring Fraud in a New Risk Era” episode of the ISACA® Podcast.
Christina Luttrell
Is the chief executive officer (CEO) for GBG Americas, comprised of Acuant and IDology, the premier identity verification, regulatory compliance and fraud prevention provider for all industries to establish trusted digital identities.