" class="no-js "lang="en-US"> How Robust Identity Verification Can Help Bank Security Officers
Sunday, September 24, 2023

EXCLUSIVE: Trulioo on How Robust Identity Verification Can Help Bank Security Officers in Uncertain Times

By Hal Lonas, Chief Technology Officer, Trulioo

The string of 2023 U.S. bank failures, starting with Silicon Valley Bank, created a perfect storm for fraudsters who moved quickly to take advantage.

Silicon Valley Bank, with about $210 billion in assets, marked the largest bank failure since the 2008 financial crisis, and a subsequent Federal Reserve report directed plenty of blame, including toward itself. The report described failure in account oversight, risk management, sudden interest rate movement safeguards, and other critical factors.

Silicon Valley Bank’s and other bank failures created a tense environment in which many customers quickly shifted their funds to other banks. Customers also sought abrupt changes to their accounts, which risked overwhelming the banking system.

Oversight gets thin, and security gaps can open when banks manually handle all or portions of their identity verification or monitoring and then face unexpected increases in volume. When that happens, fraudsters move in to capitalize on the chaos.

Strategies for Stronger Authentication

Machine learning, artificial intelligence (AI), automation, and data analytics can help banks detect, and respond to, unusual patterns of activity, changes in transaction volume or amount, and other potential fraud signals.

If a bank, for instance, finds that an onboarding customer’s risk score is high, an automated identity verification workflow can add due diligence steps. That could include identity document verification with biometric matching or additional watchlist checks.

Security officers also can monitor mobile device signals and changes in customers’ personal information to defend against synthetic fraud and other attacks.

The Importance of Monitoring

When financial institutions monitor changes to personal information such as phone numbers, emails, and addresses, they can identify fraudulent account patterns. Automated monitoring can quickly catch those changes and prompt re-verification that protect financial institutions from account takeovers or other types of fraud.

That type of low-friction monitoring can help financial institutions mitigate fraud and achieve regulatory compliance. Those compliance requirements vary among countries but generally involve strict Know Your Customer, Know Your Business and Anti-Money Laundering regulations.

Beware of Generative AI Incursions

Generative AI is spurring heightened security around customer information. It offers fraudsters a new way to scrape the web for personally identifiable or account information.

That is leading financial institutions to check their websites for content that could compromise a person’s identity or the business.

Financial institutions also can fight back. For example, they can use AI to search for anomalies or patterns that could indicate fraudulent accounts.

Automated AI and machine learning fraud signals can help financial institutions detect problems and set alerts for possible fraud attacks.

Put Automated Verification Controls to Work

Automated identity verification can help financial institutions uphold their integrity and maintain account security.

A digital identity verification partner can provide the automation that fits the needs of financial institutions searching for a balance between ongoing security and meeting customer expectations for speed and convenience.

Build Trust in Financial Institutions

In the wake of the recent closures, mid-size and regional banks are experiencing increased deposit outflows. Customers are looking for security, stability, and transparency in their financial institutions.

Onboarding is a critical step in giving customers the experience they expect, and automated, low-friction identity verification can overcome the challenges presented by manual, legacy processes. Fraud is a constantly evolving, fast-moving threat, but financial institutions can stay a step ahead with the right technology and position themselves for growth in any economic environment.

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