Opening new bank accounts has never been easier or quicker for your potential customers. But fraudsters have turned account openings into a battleground, using evolving tactics around synthetic and stolen identities and money laundering to slip through traditional defenses.
According to a recent report by Datos Insights on fraud threats, new account opening fraud is the top concern for 56% of surveyed financial institutions, with 63% experiencing a rise in synthetic identity application fraud and 48% seeing a rise in identity theft/true name application fraud over the past year1. It’s a growing challenge that demands smarter solutions.
Fraud is Evolving—Your Defenses Should be, too
Fraudsters are getting more sophisticated by the day. They’re using stolen data and AI tools to create identities that look real enough to bypass basic checks. These bad actors often maintain their accounts in good standing for months, waiting for the perfect moment to strike.
Then there’s first-party fraud, where existing customers intentionally commit fraud, eroding the trust that’s supposed to underpin every financial relationship.
These aren’t just isolated incidents; they’re part of a larger trend. Financial institutions are facing an unprecedented challenge to secure account openings while maintaining a positive customer experience.
Smarter Solutions for Safer Account Openings
So, how can your financial institution fight back against new account opening fraud? It starts with smarter, more proactive tools. Solutions like Verify Identity and Predict New Account Risk leverage the National Shared DatabaseSM Resource – which contains a rich set of deposit performance data contributed by more than 2,500 financial institutions. Using this shared banking data, Early Warning® is able to deliver deep insights designed to help your bank or credit union stay ahead of fraud while delivering a seamless experience for legitimate customers.
Verify Identity takes a data-driven approach to identity verification. By leveraging the extensive network and advanced analytics offered by Early Warning®, you can authenticate identities in real time and flag inconsistencies that might indicate synthetic identities or stolen credentials. It’s a solution designed to protect financial institutions without adding unnecessary friction for legitimate customers.
Predict New Account Risk goes one step further by anticipating potential threats. Using predictive analytics, it identifies high-risk accounts at the point of application, helping financial institutions make informed decisions and stop fraudsters before they enter your system.
The Stakes Have Never Been Higher
Synthetic identities, identity theft and money mules aren’t just generating alarming statistics, they’re real threats to your customers, your bottom line and the entire U.S. financial system. That’s why banks and credit unions report their top investments in fraud prevention moving forward are in digital identity authentication controls (55%) and identity verification/application fraud controls (43%).2
With the right tools and strategies, financial institutions can start getting ahead of account opening fraud. By investing in advanced prevention technologies and joining a trusted data consortium like the National Shared DatabaseSM from Early Warning®, you’re not just protecting your institution, you’re protecting the trust that keeps your customers coming back.
Trust in the Digital Age
Want to dive deeper into the latest fraud trends and how to prepare for them? Download the full Trust in the Digital Age report from Datos Insights and Early Warning® and discover actionable insights to help your institution stay one step ahead.
1. Datos Insights, Trust in the Digital Age: Preparing for Tomorrow’s Fraud Threats Today, Dec 2024
2. Datos Insights, Trust in the Digital Age: Preparing for Tomorrow’s Fraud Threats Today, Dec 2024