Financial institutions using passwords and PINs are on the edge of facing a surge in Account Takeover Fraud (ATO). Obtaining Personally Identifiable Information (PII) and hacking into bank accounts has become easier for cybercriminals. ATO led to a loss of more than $11.4 billion in 2021, a significant increase of 90% from 2020.
ATO drives several repercussions for financial institutions involving reputation damages, money loss, legal proceedings, and customer drop-off. To increase security and accuracy within their operations, they need to integrate biometric identification systems as countermeasures. While fraudsters employ advanced techniques to take over accounts, AI-powered IDV services go otherwise. This blog entails strategies for this crime and how biometric identification measures counter them. It is also worth noting that biometric security improvements can be implemented on-premise with secure access granted to those who are correctly identified. These require biometric devices, some of which are available through the BiometricSupply.com store.
Techniques Used for Illegitimately Taking Over Customers’ Accounts
Fraudsters steal customers’ confidential details such as name, social security number, date of birth, answers to secret questions, and passwords to take over their accounts. Criminals then perform illicit payments, transfer money to their accounts, place orders, and apply for financial benefits. In return, the legit customers are losing their financial rights with high chances of facing legal proceedings.
Financial institutions using biometric security systems are placing enough precautions to counter ATO. By using facial feature verification, voice recognition, and liveness detection, they can ensure that the user is in the physical world while accessing the account. Biometric identification solutions further ensure seamless registration and secure onboarding. However, criminals are leveraging several fraudulent techniques to exploit clients’ privacy. These strategies further involve:
- Bot Attacks
Fraudsters create malicious bots to hack financial systems and perform high-volume brute force attacks. Moreover, this advanced technology helps criminals bypass biometric identity checks. Both attacks involve highly sophisticated AI/ML technologies that make detecting their efforts challenging.
After hacking financial institutions’ records, fraudsters can access thousands of IP addresses. Furthermore, this leads to taking over a huge number of associated accounts. Hence, criminals can steer clear of biometric authentication and suspiciousness detection.
- Phishing Attempts
Criminals impersonate legal entities that make their identities believable to commit phishing attempts. By obtaining certain confidential and banking details, imposters easily trick customers by convincing them to disclose information. Furthermore, deepfake attacks enable criminals to make their identities and intentions legit. Insufficient biometric identification solutions can aid in helping fraudsters fund terrorism and other illicit activities.
- Using Details to Create Combinations
Criminals purchase confidential information from huge data containing dumpsters. These can be either dark web or fraudster-holding databases. This attempt later helped criminals carry out data stuffing to take over accounts. Using different combinations, they can get their hands on the right one. Hence, replacing traditional passwords with biometric user authentication has become a liability for financial institutions.
- Social Engineering Scams
Fraudsters copy/paste scattered information regarding customers from unprotected databases, open platforms, and social media sites. This leads to social engineering scams where criminals can create log-ins and passwords for hacking accounts. However, with biometric identification solutions in place, financial institutions can provide additional layers of security during digital onboarding.
- Data Breaches Within Legitimate Sources
Sophisticated breaching attacks go undetected by traditional fraud prevention measures as criminals. Data theft is among the most common security threats financial institutions face while digitizing their operations. Therefore, they require biometric identification measures to protect confidential information and restrict activities leading to ATO.
Biometric User Authentication for Detecting Criminal Activities
By implementing biometric identification solutions, financial institutions can prevent customers’ exposure. Advanced authenticity checks can further ensure users’ presence while transacting or validating payments.
Financial institutions use biometric security mechanisms that provide additional layers of accuracy to enhance security. The system asks for a real-time selfie and a thumb impression to grant accounts access. Similarly, along with these, liveness detection, gesture analysis, and ongoing monitoring of financial behavior further increase efficiency in detecting ATO. Ultimately, biometric ID verification protects customers from malicious criminal traps.
After gaining illegitimate authorization of accounts, criminals apply for governmental benefits, avail of medical insurance, exploit institutions’ reputations, and increase regulatory scrutiny. Making biometric security solutions a part of their system enables financial firms to allocate services to actual account holders.
Concluding Remarks
Biometric security systems enable financial institutions to authenticate customers before authorizing access. This later aided in countering identity fraud and the flow of illicit funds through legitimate institutions. Biometric identification technology replaces passwords, OTPs, and simple log-in tactics to enhance accounts’ security. Criminals camouflaging documents or forging identity information can not recreate facies and other biological/behavioral features. Hence, biometric recognition solutions are enhancing financial institutions’ integrity while ensuring higher levels of security.
