• Gus Tomlinson, General Manager Identity Fraud at GBG


• 20.05.2021 06:30 pm
#identity #technology

As the new tax year approaches, we’re seeing consumers across the country looking to take advantage of their tax-free ISA allowance. However, as they open ISAs and seek out the best ISA deals, consumers are also putting themselves at risk of being targeted by fraudsters. This is especially true this year, with financial services now operating remotely across digital platforms. Our recent research shows that 36% of consumers are more worried about fraud in banking as a result of COVID-19. 

This ISA season, it’s therefore crucial that consumers and businesses understand potential scams and threats. For example, a fraudster could steal a consumer identity to move money into an ISA in their name, or they could trick consumers into transferring money to a fake company or fraudulent account.

Rising fraud during the pandemic

Over the past year, we’ve seen opportunities for fraudsters rising. Our research found that 31% of consumers have opened an online banking account in the past year. At the same time, 1 in 5 consumers has been a victim of identity fraud in the past year, with 46% seeing phishing as a key threat. Essentially, the recent shift towards digital has created a perfect environment for fraudsters to operate in, with lots of new technology tools to capitalise on this, such as caller ID spoofing or forwarding scams. Establishing digital trust this ISA season will be therefore more important than ever for businesses and financial services providers.

Detecting fraud with data

As the risk of scams rises, so too will the importance of data analysis to unearth consumer behaviours patterns and determine transaction risk levels. It is the new link in the payment journey to validate if a relationship exists between the payer and payee, which will enable the authorisation of any transaction. If the relationship in question passes four degrees of separation, it is safe to view it as fraudulent activity and flag for further investigation. For online service providers, data is the only effective route to define the degrees of separation between transacting parties, and therefore highlight if a transaction is plausible.

Another successful technique used to tackle rising scam threats is decisioning based on key behaviours. For example, using data surrounding a consumer’s usual activities to determine whether an activity is ‘normal’ for them – such as if they usually access their online banking in the evening, rather than at midday - or if it suggests unusual, and potentially fraudulent, activity.

A multi-layered approach to fraud

Taking a multi-layered approach to fraud prevention will therefore be crucial this ISA season, as technology solutions alone cannot beat online fraud. We need to use data and behavioural decisioning to validate the relationship between the payer and payee and therefore determine a transaction risk level. Having a comprehensive view of potential risks and understanding the context surrounding transactional decisions will help online services providers to protect their customers and establish digital trust.

It’s also important to remember that the internet was built without 'identity' in mind - but as COVID-19 has caused a surge in online activity, businesses have had to adapt to protect users from scammers and fraudsters who continue to take advantage of the situation. Today, the complex set of data points which shape who we are, are now vital in keeping the wheels of commerce turning. They create digital trust, allowing people and providers to interact safely and remotely without opening the floodgates to fraud.