It is thought that banks, since they can write fraud losses off as deductions, do not actually care about fraud. The ability to write fraud losses off gives the impression that banks are not motivated to prevent loss, since it has no effect on their bottom line. However, this belief is a myth.
Banks do care about fraud; complacence in fraud management would erode faith in the banking system. KYC, AML and regulations enforce fraud consciousness among banks, with serious penalties in place for non-compliance. Apart from this, the bank in question also faces reputational damage that can be hard to recover from.
It’s true that banks are willing to write fraud losses off, however it’s not for the tax incentive. Rather, it’s because less than 25% of fraud losses are recovered. The high cost and low recovery rate often make writing the loss off a more viable option for banks, albeit a rather undesirable approach.
Banks all over the world have cited data breaches and cyber fraud as their primary concern. With the rise of phishing, account takeovers, identity theft, identity impersonation fraud and various other kinds of cyber breaches all rising in the financial industry, many banks are making large investments in fraud prediction and prevention.
Current fraud management mechanisms are not enough; there is a need for additional preventative measures. One consideration is evaluating using strong authentication to help provide assurance around the validity and integrity of user interactions.
Visa recently reported that 86% of their customers demand biometrics to be a part of their payment experience. Not only do they want secure payment experiences, they also want an easy passwordless experience. This is good news for banks, as passwords are expensive to manage; up to 40% of call center requests are related to password resets.
LoginID’s suite of FIDO-certified biometric authentication solutions provide banks a way to combat cyber fraud while ensuring a smooth user experience. Banks can, through LoginID’s solutions ranging from passwordless login, transaction confirmation/digital receipts with digital signatures, and identity verification, fight cyber fraud before it occurs. LoginID enables developers to integrate quickly through a highly scalable SaaS platform, thanks to its developer-centric SDKs and APIs.
LoginID is disrupting the Consumer Identity and Authentication market; LoginID is a FIDO-certified passwordless authentication solutions provider, offering SaaS-based Strong Customer Authentication Solution coupled with Digital Onboarding, Identity Verification and eKYC solutions. Backed by serial fintech entrepreneurs and strategic partners such as Visa, LoginID is a strong global team based in San Mateo, California and Toronto, Canada, who are experts in security, encryption and tokenization.
LoginID’s advantages include:
- A FIDO2 / FIDO UAF certified biometric authentication solution
- Extensive APIs and SDKs available for integration
- Documentation created by developers for developers
- A scalable business model that grows with your business
- An OpenSaaS plan to support start-ups
- Transaction Confirmation with Digital Signature Service
Learn more about LoginID’s FIDO2 and FIDO UAF biometric authentication here.