There is an upward trend regarding the volume of improvised identities, stolen or fabricated, which are used to establish all forms of relationships with financial institutions. The nature of the ever increasing digital transformation in financial services means more personal information is accessible to criminals, whether through major data breaches or attacks on individual accounts.
Synthetic identity fraud has become more pronounced over the past five years. The failures of current identification and authentication systems have enabled the creation of new, fake identities that use real data points stolen from multiple people (real SSN with the name of a different person at yet a third person’s physical address).
And once identity is stolen...
... Well, basically everything goes. Once hackers and other criminals have established fraudulent relationships with financial institutions, there's a full menu of financial crime possibilities. (Source: Fiserv) For example, a fraudster can take out a loan and not pay it back, make a small deposit and take advantage of overdraft services, or establish a mortgage, while avoiding being caught during the income verification process.
A few stats: According to McKinsey, synthetic identity is the fastest-growing form of financial crime in the United States. According to LexisNexis Risk Solutions, 61% of fraud losses for large banks stem from identity fraud. In 2019, criminals were able to steal over $15 billion via synthetic fraud, with over 15 million consumers directly impacted.
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Leveraging the BlockID Private Blockchain Ecosystem entails storing the customers and employees biometric information in a virtually incorruptible system to ensure they are who they say they are at all times throughout the process. Employees' and customers' data stored in our distributed ledger aren't subjected to data breaches.
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Alex Schlager, Executive Director and Chief Product Officer of security services at Verizon Business