Soaring scam and fraud sophistication remains top challenge

Just over three-quarters (76%) of banks surveyed believe fraud cases and scams have become more sophisticated, according to the new Mitek Systems Identity Intelligence Index 2024 conducted in January 2024.

Soaring fraud sophistication remains top challenge

Financial institutions (FIs) are on the frontlines of the evolving threat landscape and the research reveals the concerns that affect them each day as they try to keep people, their money and their data safe.

The global survey of 1,500 financial services risk and innovation professionals located in the UK, US, and Spain to statistically validate what it hears from company leaders and help them plan for what is next.

Key findings:

Banks battle diverse fraud threats – from deepfake tech to money laundering

Banking risk and innovation leaders surveyed grapple with concerns across many different fraud types. Their biggest fraud threats are currently money laundering (25%), account takeover (23%) and forgeries (21%), while the biggest challenges today are the rise of AI-generated fraud and deepfakes (37%).

Leaders face the constant challenge of keeping up with these threats as they evolve in real-time so they can do right for their customers and fight fraud. Almost a third (32%) of risk professionals estimate that up to 30% of all transactions are fraudulent; this provides insight into how complicated the fraud landscape is today.

New customers give banks the biggest shiver

The findings reveal that new customers are often the riskiest. Banks surveyed cite that customer onboarding, or account setup, is where they see the most fraud (42%), and the most risk (41%).

Worryingly, nearly 1 in 5 (19%) banks find it hard to identify customers at any stage of the customer journey despite global Know Your Customer (KYC) regulations aiming to put due diligence in place for organisations.

Banks ask for regulatory intelligence and tech simplicity

For banks that believe they could do more to protect customers, they place equal importance (36%) on needing a better understanding of the latest regulations, a reduction in the technology stack, and the ability to respond real-time to customer requests.

When comparing their security measures to prevent and/or catch fraudulent attacks, 41% of fintech professionals have identity verification in place, compared with 33% of mature banks.

Around 1 in 3 banking professionals cite using both liveness detection (36%) and biometrics (32%) to prevent and/or catch fraudulent attacks.

“Financial institutions are under attack,” comments Chris Briggs, Senior Vice President of Identity, Mitek Systems.

“In today’s banking world, we know our customers are overwhelmed by an increasingly complex fraud landscape, ranging from AI-generated fraud and deepfakes globally, to record high increases in check fraud in the US. We need to unite government, businesses and technology to keep people safe online.”


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