New Account Fraud
New account fraud (NAF) is growing rapidly. With the move to digital account opening and the rise in synthetic IDs, NAF is a more than a $5 Billion problem in the US alone.
NAF
What is NAF?
New account fraud is the opening of an account with stolen or fabricated identity, with the intent to commit fraud. The bad actors, individuals or organized groups exploit vulnerabilities in prevention controls and processes to create the new account.
Why NAF is growing?
New account fraud is growing very fast, this can be contributed to:
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Financial institutions are moving to a fully digital account opening
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Fraudsters use of AI and automation is creating fraud on scale
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Synthetic and fabricated identities are on the rise
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Insufficient collaboration between financial institutions to share information
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Lack of an orchestrated NAF prevention controls ecosystem
Prevent NAF
The steps
New account fraud prevention steps should include:
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Identity verification and proofing (KYC)
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Document verification
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Device and connection monitoring controls
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Behavior and profile monitoring controls
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Consortium data and history data controls
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New account fraud prevention dedicated model
What should you do?
To prevent new account fraud financial institutions must have the required processes and controls to support the steps above. You should:
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Have a risk assessment to update your controls and process
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Use data from consortium, KYC process, customer datasets
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Use AI/ML modeling for new account fraud
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Tune new account detection model
Going beyond
To be a head of the curve, you should go beyond standard NAF prevention:
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Leverage AI based network relation analysis
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Incorporate synesthetic identity detection models
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Leverage AML data in the NAF fraud detection
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Build a holistic unified NAF prevention environment
Want to discuss NAF and hear how we can help? Lets talk!