Application fraud detection is a major threat to the financial industry. Fraudsters use stolen or fake information to apply for credit cards, loans and other services. This results in financial losses and compliance risks. Detecting this type of fraud requires sophisticated, yet effective application fraud detection. This includes fraud and financial crime prevention software within the application path for both digital and more traditional onboarding processes.
Criminals commit application fraud for a variety of reasons, including money laundering and terrorist financing. This can be a one-off event perpetrated by a single individual or an organized crime operation. Regardless, the estimated losses are staggering.
Protecting Your Business: The Importance of Application Fraud Detection
The digital age has made it easier than ever for criminals to steal personal information and commit identity theft. Criminals can access data from any location in the world, and they have advanced tools to help them steal, manipulate and exploit this information.
This can be in the form of phishing attacks, hacking and more. Fraudsters can also make use of social media accounts and other sources to obtain personal data. They can then use this information to commit application fraud, which is the most common form of financial fraud.
Financial institutions can be especially vulnerable to this type of fraud because it is often committed by a trusted third party. This can include family members, friends, and other people who may have access to an applicant’s financial information. Fraudsters can also create synthetic identities, which are a combination of real and false personal data. This helps them swindle financial institutions out of billions each year.