For the first time since the inception of IDology’s Annual Fraud Report, balancing consumer friction with fraud prevention has taken the first place of the challenges companies are facing for fraud prevention, surpassing shifting tactics being used by fraudsters, which until this year was the dilemma of greatest concern.
For the past six years, IDology has surveyed hundreds of businesses to gain an understanding of the fraud landscape, including new threats rising in prevalence and leading trends in fraud prevention. IDology’s Sixth Annual Fraud Report delivers some interesting insights into how companies are viewing and utilizing identity verification.
The competition for customers is fierce and the customer experience is paramount. However, at the same time, the number of data breaches and quantity of personal information on the dark web continue to grow. The Sixth Annual Fraud Report suggests that the emphasis on reducing friction while deterring fraud is stronger than ever as consumers have higher expectations for speed, ease and security for transactions. From IDology’s recent Consumer Digital Identity Study, we know that 31 percent of consumers have abandoned an account-opening process because it was too difficult or took too long, indication that companies are rightfully concerned about how to balance frictionless experiences with security measures.
Eighty-five percent of responding companies agreed that identity verification has the potential to be a strategic differentiator. With the customer experience critically important in every industry, companies that employ smart, multi-layered identity verification solutions that are also frictionless will set themselves apart. The report also revealed that the most popular identity verification trends over the next three to five years will incorporate the use of mobile device attributes, artificial intelligence, machine learning and submitting ID documents via mobile devices to get verification accomplished faster and safer.
Continued data breaches and the subsequent high availability of personal information on the dark web are some of the key reasons that 58 percent of businesses experienced more fraud in 2018 than the previous year. Unsurprisingly, from our Consumer Digital Identity Study we also know that 57 percent of consumers were “extremely” or “very” concerned that their personal information had been exposed due to a data breach.
Fraud appears to be growing most dramatically with regard to mobile devices, as evidenced by the report’s discovery that mobile fraud prevalence increased 117 percent over the previous year. Companies indicated that mobile fraud is also the number one fraud vector they feel the least prepared to respond to, compared to 2017.
It is important to note that there was an increase across all methods of mobile fraud, including spoofing, SMS and SIM swap.
This infographic illustrates some of the key findings from IDology’s Sixth Annual Fraud Report:
This report sets itself apart as it presents information based on firsthand feedback from fraud and risk professionals, providing a unique insight into the challenges companies are facing related to fraud. From the information gathered, we have seen how the mindset around identity verification is changing and how companies are now viewing it as a strategic imperative. Comprehensive identity verification platforms that leverage multiple layers of identity attributes and diverse data sources, and that also have flexible options to present dynamic, smart step-up mechanisms to approve more legitimate customers, are gaining traction with forward-thinking companies as a way to respond to rising fraud threats and remove customer friction.