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Detecting account opening fraud techniques is critical to preventing fraudsters from leveraging accounts for unauthorized transactions, loan applications and other criminal activities. New account fraud is a problem for many industries including financial services, online banks, iGaming sites, dating apps and e-commerce platforms.

Fraudsters are increasingly using stolen or synthetic identities to open fraudulent accounts. Failing to detect these scammers at account opening and in the early stages of their accounts’ activity can lead to significant financial losses for FIs. Detecting these types of crimes during the application process is essential for the success of any security strategy.

Techniques to Detect Account Opening Fraud

In most cases, fraudsters will try to blend in and act as a normal customer to avoid suspicion during the account opening process. This makes it difficult to identify them. Fortunately, there are certain red flags to watch for that can help a FI spot potential problems.

For example, if the address on the presented ID document doesn’t match the address in the online application or the person’s physical address at the time of their photo – this is a clear sign that an individual is not who they say they are. Similarly, if the device fingerprinting check shows multiple emulator or virtual machine usage by a single individual – this is also a strong indicator of fraud.

It’s important for FIs to use robust data validation and identity verification solutions that are seamlessly integrated in order to quickly recognize these anomalies. Artificial intelligence is key to detecting these anomalies and can be leveraged during the identity verification process to verify that a digital user is the same as their physical counterpart.


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July 2024