Meghan Sutherland, CEO, FiVerity
In light of the recently reported data breach at National Public Data that exposed 2.7 Billion Social Security numbers (nearly every American) and other sensitive information, financial institutions now face unprecedented identity fraud risks. With vast amounts of personal data now in the hands of criminals, financial institutions must understand and prepare for the fraud threats that are likely to surge now and in the coming months. Here are three critical threats to watch for and how to mitigate them.
1. A Rise in Synthetic Identities at Account Opening
The recent breach is expected to fuel a significant increase in synthetic identity fraud (SIF). Criminals are likely to use the stolen data to create new, fabricated identities, which they will then use to open fraudulent accounts. These synthetic identities blend real identity information, making them particularly difficult to detect with traditional verification methods.
For financial institutions, it’s vital to put systems in place to detect SIF early, before accounts are opened, to catch these synthetic identities before they become a threat. This not only enhances security but also streamlines operational efficiency by reducing the need for manual reviews and investigations down the line.
2. Hidden Synthetic Identities Within Your Existing Customer Base
The breach reportedly occurred in April, meaning there has been ample time for synthetic identities to infiltrate the systems of financial institutions. These fake identities often lay dormant, behaving like legitimate customers until they are ready to "break out" and commit fraud.
Traditional detection and verification tools may fail to spot these identities, as they often mimic normal customer behavior. Regular audits and continuous monitoring are essential to uncover these hidden threats. By proactively identifying and removing synthetic identities from your existing customer base, you can protect your institution from significant financial losses.
3. Surge in Customer Account Takeovers
With more personally identifiable information (PII) now available to criminals, the threat of customer account takeover is higher than ever. Combined with automation and AI-powered fraud tools, criminals can execute more sophisticated scams at a scale previously unimaginable. These attacks can easily bypass standard verification and authentication measures, leading to identity fraud that can wreak havoc on your customer accounts and challenges in managing customer relationships and maintaining trust.
To combat this, financial institutions should adopt proactive identity trust monitoring. By leveraging industry-wide data and collaboration, you can prevent the spread of such fraud before it reaches your organization while minimizing the financial damage to your customers elsewhere. Monitoring should not just be a reactive measure but an ongoing process that evolves with emerging threats and goes beyond identifying risky transactions within your institution.
Conclusion
As the fallout from this massive data breach continues to unfold, financial institutions can take proactive steps to safeguard against these emerging threats. Implementing robust identity trust management strategies will be crucial to protecting your customers, maintaining your institution’s reputation, and ensuring regulatory compliance.
At FiVerity, we understand the challenges you face in this rapidly evolving landscape. You don’t have to navigate these vulnerabilities alone. We’re offering a free consultation and portfolio analysis to help you better understand the state of identity trust in your organization and how FiVerity can help you improve it. Contact us today to take the first step toward helping achieve a more secure financial future.
Meghan Sutherland, CEO, FiVerity
Best regards,
Meghan Sutherland
CEO, FiVerity