3 key aspects of a layered defense against cross-industry fraud
Fraudsters continue to innovate in a highly digital environment, jumping from industry to industry looking for vulnerabilities to exploit. Digital fraud doesn’t recognize national borders, stop with a single business or remain within a single industry.
Tax season in particular, which often runs from January 29 through April 15, can prove to be a big potential payout for fraudsters. Given key trends commonly seen during tax season, business must prepare themselves to deter surging fraud. With a layered defense that relies on AI precision, human intuition and cross-industry intel, businesses are empowered to make smarter decisions around higher risk identities.
Cross industry fraud is trending threat
Fraud in general is seeing an unfortunate surge within specific industries. Online payment fraud was projected to surpass $48 billion in 2023, up from $41 billion in 2022. GBG uncovered that 72% of US businesses experienced fraud attempts last year – the highest rate of any market surveyed and far outpacing the 55% global mean rate.
Tax season, however, highlights how fraud can potentially start in one sector and move to another over a short period of time. Creating a holistic verification strategy based on cross industry insights requires a shift in mindset. Fraud prevention teams typically focus on historical data from within their business. This makes sense since it’s what they know.
Businesses are naturally siloed from fraud trends that may start in one industry before potentially moving into their sector. Criminals exhibit a high level of ingenuity, leveraging artificial intelligence to perfect fraudulent activities. A collaboration between fraud prevention teams across different industries is more crucial than ever.
Curb the threat of fraud with layered verification
Research indicates that 80% of fraud prevention professionals believe in the necessity of continuous monitoring beyond the authentication stage to combat evolving, cross-industry, fraud tactics. By taking a few key actions, firms are empowered to build a layered strategy to monitor for potentially suspicious activity and make smarter decisions.
With the blow strategies in mind, businesses can build a layered approach to identity verification, which allows them to better deter trending threats.
1. Implement AI and ML to foster automation
Consumers set the bar high for seamless and secure digital interactions. Our 5th Annual Consumer Digital Identity Study 37% of consumers abandoned a digital onboarding process because it was too time-consuming.
AI brings flexibility and scalability to identity verification with its ability to quickly scrutinize vast volumes of digital data and uncover patterns of suspicious activity. As a part of a layered verification strategy, AI and ML based solutions can help businesses automate their decisioning.
2. Increase confidence in AI decisioning with human intuition
While AI has an impressive ability to quickly analyze a vast amount of data, it’s not a silver bullet. A trained fraud analyst will catch novel threats AI systems miss, and with continuous feedback, enable a learning model to improve through constant input and refinement of data.
Pairing human intelligence with AI, businesses can leverage the intuition and expertise of a team of fraud analysts to detect novel fraud and provide closed-loop data transparency.
3. Improve visibility into potential fraud through cross industry collaboration
With cross-industry intelligence, business can gain visibility into fraud patterns seen over a vast network. The IDology Consortium Network, for example, has the benefit of being an industry first in addition to having 4,500+ participating companies and 15 million known fraudulent attributes.
A cross-industry view gives business across multiple industries the chance to stay informed on fraud trends empowering them to be more proactive in their fight against fraud and safeguard revenue.
How to unlock advance verification tech
GBG’s State of Digital Identity Report found that 62% US consumers said they would be more likely to onboard with a business using more advanced identity verification. Combining AI precision, human intuition and consortium intelligence empowers companies to offer an advance solution to the threat of rising fraud.
Watch IDology fraud experts on a recent webinar as they share key insights into why prevention fraud is a group effort and how businesses can implement a layered approach.