How to avoid identity theft in banking
Every financial institution should, if not already, aim to improve customer retention and customer experience by reducing account takeovers. Strong authentication bound to strong identity verification protects customer data while giving assurances around customer authenticity. This helps eliminate account takeovers and helps banks, brokerage firms, investment companies, insurance companies and more boost customer retention while proving themselves to be a secure and trustworthy institution.
Solutions such as LoginID help financial institutions, banks and card issues to integrate strong authentication and identity verification.
Identity Theft: A Growing Threat
The United States has a growing concern: identity theft. Reported identity theft cases increased over 113% from 650,000 in 2019 to 1,388,000 in 2020.
Some of the most common types of identity fraud are credit card fraud, government document fraud, loan and lease fraud, government benefits fraud, employment or tax-related fraud, bank fraud, and phone or utilities fraud, among others.
Even though a lot of reported identity theft cases involve credit card misuse, the biggest concern is account takeovers via identity spoofing — this has much deeper implications.
Identity theft, when it happens, puts banks, card issuers, and any kind of financial institution in a negative light; identity theft implications stretch beyond financial losses, all the way to consumer mistrust. Banks, card issuers, insurance companies and other financial institutions can mitigate mistrust and financial loss risks by enabling identity management and digital verification through secure identity solutions.
The best-in-class digital onboarding solutions conduct end user identity verification by digitally scanning the end user’s identification document, or ID, performing a liveliness check or liveliness detection, and using biometrics to match the end user to their scanned ID document as a way to prove that the end user really is who they say they are.
With the rise of digital services, online automatic identity verification solutions are also more common; apart from secure identity verification, these services also enable secure account recovery without human intervention. This helps reduce the time and cost implications of helping users recover access to their accounts.
Tech giants like Apple are, in fact, coming up with their own identity verification solutions, specifically allowing users to store ID cards on their mobile devices. While financial issuers might think this might help them, the risk is the loss of a direct to consumer relationship by handing this function to a tech giant or a big tech player.
Reducing account takeovers involve a strong binding of authentication and identity. Banks, credit card issuers and other financial providers need to ensure they enable end users to securely verify themselves, even if their primary device is lost. Solutions like FIDO provide financial institutions with the additional trust levels required to eliminate phishing and account takeover risks.
FIDO authentication is the de-facto authentication standard, proven to protect against phishing, account takeovers and other credential-based attacks. If a user loses access to their primary FIDO authentication device, the FIDO-protected account access can still be recovered with a high level of assurance. FIDO binding has additional use cases, such as in the account onboarding process; it helps financial institutions meet Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
FIDO Authentication is the de-facto authentication standard that has been proven to offer protection against account takeovers from phishing and other such credential-based attacks. If a user ends up losing their primary FIDO authentication device or if the device gets stolen, then recovering access to the FIDO-protected account can still be done with a high level of assurance. FIDO binding has additional use cases such as in the account onboarding processes, as it helps the organization meet Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements.
How LoginID and FIDO help financial institutions
LoginID’s FIDO2 multi-factor authentication (MFA) solution is highly secure, and very simple to integrate, helping reduce onboarding friction. LoginID’s FIDO2 solution enables banks, card issuers and all kinds of financial institutions offer their customers and end users strong authentication and identity verification across desktop and mobile.
LoginID’s FIDO2 solution is compliant with regulations such as the GDPR and the PSD2.
With LoginID’s FIDO2 solution, financial institutions, banks and card issuers get:
- A FIDO2 / FIDO UAF certified biometric authentication and identity verification solution
- Extensive SDKs and APIs available for integration such as Android, iOS, Web SDK and more
- Detailed and thorough documentation created for developers, by developers
- A scalable business model that grows with the bank, card issuer, insurance provider or any financial institution
- Startup support with a free to start ‘OpenSaaS’
- Transaction Confirmation with Digital Signature — a tool for financial institutions, banks and card issues that provides a proof of users’ biometric authentication receipt for transactions
Financial institutions, banks and card issuers can get started by contacting our sales team on email@example.com.
To learn more about LoginID’s FIDO2 and FIDO UAF biometric authentication, click here.