The recent shift to EMV (embedded chip) cards is helping to contain existing card fraud, according to the new Identity Fraud Study by Javelin Strategy. According to the study, existing card fraud losses declined from $8.1 billion in 2017 to $6.4 billion last year. However, 14.4 million people still experienced fraud in 2018. While the number declined, those that were victims paid a higher price than in years past.
“While the decrease in card fraud rates is undoubtedly good news for victims, fraudsters have turned their attention to opening and taking over accounts,” said Javelin Strategy & Research Senior Vice President, Research Director and Head of Fraud & Security Al Pascual. “As financial institutions and other organizations modernize account opening processes, it’s paramount that they incorporate tools like document scanning, behavioral risk assessments and digital identity. This will streamline digital applications while challenging fraudsters.”
Fraud Beyond the Cards:
Losses from fraud rose in the areas of mortgages, student loans, and car loans. As Banking Exchange has recently reported, fraudsters are becoming more and more efficient at cracking id codes, which means traditional password methodologies are becoming less and less of a deterrent. Fraudsters are beginning to win the battle over authentication challenges. Mobile account takeover victims increased year over year by almost 300,000 according to the study. One-time passwords sent by text message, are being cracked on a regular basis.
Jim Johnson of FI Payments and Wealth, FIS, commented, “Given the agility and tenacity demonstrated by fraudsters in 2018, financial institutions should assume that every account type will be under greater pressure going forward. Adequately defending customers from these new security assaults will require the development and adoption of next-generation fraud mitigation strategies.”
The annual Identity Fraud Study is a comprehensive analysis of identity fraud trends, independently produced by Javelin Strategy & Research. The lead sponsor of this study is FIS, a global financial services technology provider. Other sponsors include marquee sponsor Experian, a global information services company, and educational partner GIACT, a payment fraud mitigation company. Javelin Strategy & Research is a Greenwich Associate Company.
Tagged under Technology, Payments, Retail Banking, Financial Trends, Risk Management, AML & Fraud, Feature3, Security, Cyberfraud/ID Theft, Operational Risk, Feature, Customers, People, Cards, Online,