PYMNTS is calling attention to the threat of synthetic identity fraud in its latest Monetizing Digital Intent Tracker. In doing so, the organization advocated for the use of behavioral biometrics technology as a potential solution to the problem.
In that regard, PYMNTS noted that legacy identity verification methods like passwords are largely ineffective against more sophisticated forms of fraud. Traditional identity fraud occurs when a cybercriminal impersonates a real person. Synthetic identity fraud, on the other hand, can be trickier to catch because the criminal creates a false identity that remains under their control. They may use stolen personal information like emails and social security numbers to make a false account, with the password and even any static biometrics (like fingerprints) used to create the account being read as authentic insofar as they belong solely to the fraudster.
Behavioral biometrics is an effective fraud prevention tool because it can spot suspicious patterns during the account creation process. For example, a behavioral solution can analyze the way that someone navigates a screen and inputs personal information to determine how familiar that person is with the form fields and the actual information being entered. Fraudsters are more likely to move quickly because they have filled out the same form multiple times, and because they may be copy-pasting personal information from another document.
According to PYMNTS, synthetic identity fraud carried a $20 billion price tag for financial institutions in 2020, with the average synthetic account walking away with roughly $90,000 before getting caught. Behavioral biometrics has also become popular in the insurance industry, where 80 percent of companies are now using the technology to combat insurance fraud. That figure is up from 55 percent in 2018.
Meanwhile, PYMNTS advises parents to keep tabs on their children’s data. The firm noted that many cybercriminals like to use the personal information of children to open synthetic accounts, and will often use those synthetic identities to initiate phishing attacks and hack school district databases for more information.
Fact.MR places the behavioral biometrics market at $9 billion in 2031, while Global Industry Analysts believes it will hit $3.9 billion in 2027. TransUnion has also warned that synthetic identity fraud will increase in the wake of COVID-19.
February 25, 2022 – by Eric Weiss