Financial Fraud Experts Turn To Behavioral Biometrics to Stop Scam
- By CDOTrends editors
- April 25, 2023
LexisNexis® Risk Solutions’ new whitepaper, Multifaceted Fraud Attacks: Behavioral Biometrics as a Defensive Tool, showed that most people have been using person-to-person (P2P) payment platforms more frequently since the start of the pandemic.
However, a consumer survey reveals that 10% of U.S. respondents use the services less often, 9% of U.K. consumers, and 7% in Singapore. Of consumers who had reduced using P2P services, a significant proportion of consumers in the U.S. (43%), UK (46%) and Singapore (35%) changed their behavior due to fraud concerns.
“Fraud executives are deeply concerned about increasing fraud attacks and the effect it has on consumers and their organization’s reputation when losses occur,” said Stephen Topliss, vice president for fraud and identity strategy at LexisNexis Risk Solutions. “Businesses need the most multi-dimensional view available of an identity to make high-quality decisions. Behavioral biometrics allows businesses to provide an optimal customer experience by passively authenticating them and only inserting additional steps into their journey if there is a higher risk.”
In the whitepaper, 48% of fraud executives ranked consumer scam attacks among their top concerns in 2022 when thinking about transaction control frameworks. In addition to driving a significant amount of fraud, scams are also fraught with challenges, given that the execution of the scam requires acts by the genuine customer for the fraudster to profit.
Many organizations have begun implementing behavioral biometrics in their fraud operations. According to the whitepaper, fraud executives in North America rank their satisfaction with behavioral biometric solutions as second only to the risk engines they use. Business users’ satisfaction with behavioral biometrics ranked above more established approaches, including third-party identity verification, credit bureau scoring, device ownership, and history verification.
“The adoption of behavioral biometrics technology is appealing from both a fraud prevention and customer experience perspective,” said Jim Mortensen, strategic advisor at Aite-Novarica Group. “The capability is attractive as it authenticates users on a passive basis, in the background, and requires no active intervention by the customer beyond their normal use of the app or website.”
Behavioral biometrics and related technologies for risk scoring can help organizations address fraud and authentication challenges. Behavioral biometrics analyzes how a person interacts with a device, including attributes such as the angle at which a consumer holds a mobile phone or tablet, how much pressure they apply to its screen, surface swipes and directional motion, and typing rhythm and other keyboard patterns. It works entirely in the background without adding unnecessary friction to the consumer’s journey to create a unique profile that can help authenticate genuine user interactions and flag bad actors and sessions where legitimate users may be acting under a bad actor’s direction.
Financial fraud executives’ most common concerns include various losses because of application fraud, with bad checks, mule activity and synthetic identities all named among the top two worries by 22% of executives. Fraud investigators can find it challenging to identify synthetic identities because they may appear similar to consumers new to the country or credit. A multi-dimensional view of applicants helps fraud executives detect suspicious identities and make better-informed decisions.
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