Abstract
Overview
This report provides both a three year longitudinal assessment of new account
fraud statistics, as well as the solutions-authentication and otherwise-that
best address new account fraud risks. Due in large part to regulatory
pressures, much of financial institutions' security enhancement strategy is
focused on the authentication of existing account-holders. New account fraud
(both "true name" and "synthetic"), however, represents a large percentage of
identity fraud and new solutions are needed now.
Primary Questions
- What strategic changes will the pattern and growth of new account identity
fraud require?
- What are the barriers for solutions that address new account identity
fraud?
- What types of accounts are primary targets for new account fraud?
- What solutions-authentication and otherwise-best address new account fraud
risks?
Findings and Analysis
Knowledge Based Authentication solutions address both existing account and new
account fraud. They can be utilized by FIs to mitigate new account fraud and
more efficiently expand account bases. New account fraud is growing, with
Javelin data showing 51 percent growth in 2005, with the most prevalent
increases among new credit card accounts. FIs are and will continue to face
pressure from both consumers and from regulators to rein in new account fraud.
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