IBM Security announced on Tuesday the launch of a product designed to help banks and other service providers protect their customers against new account fraud (NAF).
As an increasing number of financial institutions allow consumers to open new accounts via the Internet – without the need to physically visit a branch and verify their identity – it has become easier for fraudsters to make a profit using the vast amounts of personal information available for sale on the dark web.
Social security numbers, dates of birth, security questions and other personally identifiable information (PII) is often available for sale for just a few dollars, allowing fraudsters to open new bank accounts that they can use for various types of illegal activities.
IBM’s Trusteer New Account Fraud aims to help financial institutions and other organizations identify fraudulent accounts. The product leverages machine learning to assess risks by checking device and network information associated with the user creating the new account in order to verify their identity.
The solution compares the IP address, geolocation and time zone data, and behavioral biometrics against IBM’s global fraud network. If the data does not match the legitimate user, the activity is likely fraudulent.
IBM pointed out that an individual does not need to be a customer of the bank where the fraudster attempts to open a new account. Organizations that deploy the product will be warned of fraudulent activity even if the targeted consumer is not their customer.
“To address NAF, it is most critical to detect it at its earliest stage: the enrollment process. This way, the provider can stop the process before any damage is done to the rightful owner of the stolen data or to the provider itself,” explained Limor Kessem, executive security advisor at IBM.
“To shorten the time to detection, service providers need a proven way to assess the risk of a new digital identity, predict potential fraud during the enrollment process and detect issues without impacting the legitimate users that frequent the site,” she added. “There are some challenges here, especially since fraudsters use valid or partially valid information to open new accounts, which can sometimes enable their scams to go unnoticed.”
A Javelin Strategy & Research study published earlier this year showed that 15.4 million U.S. consumers fell victim to identity fraud in 2016, and losses resulting from NAF are expected to reach $8 billion by next year.