Application fraud losses will cause $2.7bn in US credit card and demand deposit account fraud losses in 2020.
This forecast loss represents a rise of more than 20% since 2018’s $2.2bn losses.
The forecast is revealed in a report published by global contact data quality and identity verification solution provider, Melissa.
Entitled Identity Verification: Successful Strategies to Minimise False Positives and Risk, the paper examines two key duelling priorities. That is the challenge of verifying identity without intruding on the customer experience and the operational impact of false positives.
The report canvasses expert opinion from US banks and 32 financial crime executives about pain points and planned technology spend.
Over 13 billion data records have been stolen or lost since 2013. Around 87% of bank executives say data breaches or phishing attacks are responsible for the bulk of digital channel fraud. Application fraud due to identity theft and synthetic identity fraud also play a substantial role.
The impact of these attacks will cause over $2.7bn in US credit card and DDA application fraud losses by 2020.
While fraud is increasing the pressure to reduce or even eliminate friction from the customer experience is also growing.
Improving onboarding experience is key
And 88% of fraud executives surveyed indicate that improving the customer onboarding experience is a key business case driver.
“When data quality is not part of onboarding, the match between incoming identities and the repository relies on exact matching. That is an ineffective, error-prone practice. And it can result in myriad issues around KYC, or know-your-customer, and other regulations,” says Barley Laing, UK MD, Melissa.
Julie Conroy, Research Director of report authors Aite Group, adds: The importance of ongoing investment in new technology cannot be understated. Data is the new currency and creating intelligence from data at scale can give firms a competitive edge.”