In this world, we have become accustomed to the convenience and speed that digital solutions offer us after a reasonably swift adoption of online banking over the past few years, with the expected bumps in the road here and there. With so many new options becoming commonplace, we can grow complacent and lose sight of the scams that can appear everywhere. Identity theft, impostor scams, phishing, and laundering schemes are just a few ways fraudsters are on the attack in 2023, and why being diligent about protecting our finances is so vital.
According to the University of Portsmouth, it was estimated that in 2021, fraud cost the world economy more than $5.4 trillion. It has never been more crucial to be vigilant and aware of potential threats, to be knowledgeable about best practices, and to implement the best identity verification solutions.
Today, we will be talking about best practices businesses should follow to keep their customers secure and content, as well as the fight against digital identity fraud.
Recognize the Effects of the Customers
It’s critical to remember that each statistic is based on real people whose lives have been devastated by fraud. To create a solid plan of action, it is imperative to have a thorough grasp of the problems and how they affect your customers. The effects of identity theft on victims are significant, according to the Identity Theft Resource Center’s (ITRC) 2021 Consumer Aftermath Report. Nearly a third (32%) of the victims had money-related problems. All of these received mainly aggressive debt collector calls, and 83% of them were denied credit or loans, making it difficult for many of them to find housing or rent apartments. In rare circumstances, victims can turn to criminal activities to make ends meet, which exacerbates the problem. Knowing how seriously the effects would affect customers gives us a solid foundation from which to work. These statistics are a clear demonstration of why digital fraud prevention solutions are so important.
Cut Back on Password Use
Passwords are no longer necessary. It is now a matter of when corporations will stop using passwords in favor of emerging technology like biometrics, with many, if not most, businesses moving away from them in the near future.
The user finds passwords annoying, and they are not a very secure solution on their own. Although they have always been used to access an internet account, they are increasingly being used as identification documents, such as when signing contracts or conducting business. In this instance, the misuse of that password entitles someone to sign on your behalf. Even one-time passwords (OTPs) used as a component of multi-factor authentication (MFA) are susceptible to incidents like SIM swapping and scammers pressing victims for codes.
The Biometrics Transition
A cybercriminal would have an easy way to steal data or money if they were to fraudulently gain a password. It can be challenging to eliminate this dependency on passwords while maintaining the simplicity of use, quickness, and accessible interface that customers desire. Businesses must strike the correct balance between security and user experience when becoming passwordless; biometrics can help with this. A good alternative is passwordless authentication based on multimodal biometrics.
Authentication will depend more on easily verifiable and unique things than on things you can accidentally share or forget. According to a Visa survey, 46% of consumers believe using biometrics is easier, and 70% believe it is safer than using passwords or PINs. Biometrics not only increase security but also improve the user experience.
Falsified identification papers and synthetic identities are also becoming more prevalent, but it is very difficult to steal a verifiable biometric that satisfies accepted criteria for liveness and authenticity. Compared to other forms of identification currently on the market, multi-modal biometrics are more secure and reliable.
Data transparency is the first step in easing consumer adoption of biometrics. Companies must be transparent about the types of customer information they are collecting and how they plan to use it. Additionally, they must offer a way for individuals to express their permission for the use of that biometric as well as the option to change their minds at any time in the future.
Consumers lack confidence in the proper use of biometrics by the government, private companies, artificial intelligence (AI), or even friends. Helping customers understand their rights, particularly those resulting from new personal information and biometric regulations like the AI Bill of Rights, is the key to bridging this trust and confidence gap.
Consumers can feel secure committing their digital security to biometric-based authentication solutions with this knowledge and unambiguous communication from a reliable service provider. The decision to employ biometrics ultimately rests with the customer, who must be well informed to make the best choice.
Improve Customer Understanding of Identity Protection and Biometrics
Consumers must have faith that biometric authentication does not equate to biometric surveillance. Businesses and industry leaders are responsible for informing customers of the distinction. Businesses must, after all, serve as the first line of defense in the fight against digital fraud.
The consumer employs unique and non-transferable values when using biometrics on mobile devices nowadays, which eliminates the inconveniences of forgetting passwords, attempted fraud, and missing coverage. Security and a wonderful user experience are guaranteed if the person is aware of this. By developing biometrics that are user-friendly, secure, understandable, and well-protected, customers will be more inclined to use them as a substitute for passwords.
To further improve customer security, businesses should educate customers on how to safeguard their personal data and identity online. Businesses could share easy victories with their customers, such as how to secure your home network with strong passwords and encryption, turn off or lock your work computer when you’re not using it, and be cautious when clicking links in emails.
Customer Education on Fraudulent Schemes
Businesses must notify customers about fraud schemes that can pose a threat in addition to educating them about how to secure their identity and employ biometrics for added security. As an example, the use of voice calls by fraudsters to obtain information or persuade victims to give them access to their money is on the rise. They pose as banks or governmental agencies while knowing just enough about the customer to persuade them there is a problem with their account and trick them into disclosing account information, resulting in digital banking fraud.
Customers’ personal information is frequently used by fraudsters in account takeover (ATO) operations. To try and take over the account, they call customer service centers and pose as the customer. However, in these situations, the customer could prevent this kind of attack if they had voice biometrics set up.
It’s crucial to keep in mind that fraudsters are constantly looking for new technology to adopt and use. When preparing their defenses and assisting customers with digital fraud protection, businesses need to keep these things in mind. The best method to safeguard customers against fraud is to switch to a biometric-first strategy and inform them of its benefits.
Ready to fight digital fraud with FTx Identity? Get in touch with us today to set up a consultation and experience a demo.