Payments sector to remain an easy target for ID fraud, says report

Since Q1 2023, its share of overall global identity fraud has grown from 39% to 62% — a 59% increase. AU10TIX analysts expect this trend to continue until the sector becomes more regulated.

The payments sector continues to be fraudsters’ top target, accounting for 62% of all identity fraud attacks, according to the latest AU10TIX report “Q1 2024 Global Identity Fraud Report”, which draws insights from millions of transactions processed around the globe from January to March 2024

Although there has been a steep increase in fraud in the online gaming sector, AU10TIX analysts expect the sector share of fraud to decrease after more gaming platforms comply with new regulations and implement more comprehensive KYC and age verification solutions.

The payments sector, however, has also experienced a rise in fraud as it is viewed as a soft target due to its limited regulation. Since Q1 2023, its share of overall global identity fraud has grown from 39% to 62% — a 59% increase. AU10TIX analysts expect this trend to continue until the sector becomes more regulated.

AU10TIX’s report also compares the frequency of different fraud documents and modes, including document number, personal data, face picture, image template, and facial image capture (selfie).

US passport ID cards continue to be the most forged documents because they are easy to synthesize with deepfake technology and bypass monitoring systems undetected. As in previous quarters, fraud involving selfie capture represented less than 5% of attacks, repeatedly proving to deter attempts at identity fraud.

Dan Yerushalmi, CEO of AU10TIX, said: “Organized criminal groups are increasingly using AI to commit large-scale, coordinated identity fraud. Our advanced machine learning technology, multi-layered defense system, and consortium of 60+ tier-1 companies enable us to detect and prevent this sophisticated fraud, which most IDV platforms miss. We are committed to protecting our customers and leading the way with innovative, future-proof solutions that address emerging challenges effectively.”

AU10TIX launched a KYB solution

Earlier this year, AU10TIX launched a Know Your Business (KYB) solution designed to help companies understand with whom they are conducting business, thereby avoiding potential financial and reputational damage. The solution integrates KYB with Know Your Customer (KYC) processes, catering to a broad spectrum of business needs, from sole traders to large corporates, including KYC for Ultimate Beneficial Owners (UBOs) and related entities.

With increasing regulatory requirements, businesses across various sectors are compelled to gather and examine more data on the identities of their partners and vendors. This is essential to avoid associations with entities involved in identity theft, fraud, money laundering, terrorist financing, or other illicit activities. The challenge has been that existing KYB solutions offer limited coverage, necessitating companies to work with multiple vendors for comprehensive KYC, forgery tests, and fraud detection capabilities.

The KYB solution is available in three packages: Business Validation, Sole Trader Verification, and Enterprise Verification, each offering a range of features from basic business validation to in-depth KYC risk assessment, AML screening, and continuous monitoring for real-time compliance and risk management.

Benefits of the solution include a fully automated KYB and KYC process, advanced document verification through AI technology, a case management dashboard for managing check results, a comprehensive scoring mechanism for risk measurement, a single API call for both business and individual verification to reduce costs, and global coverage providing insights into ownership structures across more than 200 countries.

FXCM partnered with AU10TIX for KYC

In April of this year, Stratos Group, the company operating the online foreign exchange and CFD trading brands FXCM and Tradu, partnered with identity verification technology company, AU10TIX, to enhance its KYC capabilities.

According to the RegTech firm, the collaboration has resulted in a 29% increase in ID document approval rates on the FXCM platform since going live.

With the integration of AU10TIX’s Identity Verification Suite, Web SDK, and biometric solutions, FXCM has successfully automated its KYC document verification processes, reducing onboarding times dramatically from hours or even days to mere seconds.

AU10TIX highlighted that its advanced algorithms and security databases have improved document approval rates from 62% to 80%, reducing abandonment rates and opening up new avenues for revenue growth.