As ecommerce becomes the cornerstone of global retail, the holiday shopping rush around events like Black Friday and Cyber Monday presents a massive opportunity for retailers. Unfortunately, it also creates a prime hunting ground for fraudsters. With online sales growing, the threat of sophisticated fraud is more significant than ever. For businesses to thrive, they must adopt robust security measures to protect their customers and their bottom line. This guide offers key insights and actionable strategies to help you safeguard your platform against the rising tide of ecommerce fraud.

The escalating threat of e-commerce fraud

A troubling increase in fraudulent activity has accompanied the growth of online shopping. A troubling increase in fraudulent activity has accompanied the growth of online shopping. Our Future of E-commerce report shows a 21% rise in fraud between our 2024 and 2025 fraud reports. This isn’t a minor issue; we found that 1 in every 20 verification attempts in 2024 was fraudulent.

The financial impact is substantial. For more than a third of U.S. consumers, online fraud resulted in financial loss. On the business side, 13% of fraud decision-makers reported that fraud cost their company up to 20% of its annual revenue. This “fraud tax” is an unsustainable burden that demands immediate attention.

During peak shopping periods like Black Friday, the risk multiplies. The sheer volume of transactions provides cover for malicious actors to execute various scams. Key fraud types to watch for include:

• Account Takeover Fraud: Criminals use stolen credentials from data breaches to access legitimate user accounts, making unauthorized purchases and changes.
• Refund and Return Fraud: Scammers exploit return policies by requesting refunds for items they never bought or by returning used or damaged goods. This type of policy abuse is the most common form of fraud experienced by nearly half of online merchants.
• Transaction and Chargeback Fraud: Using stolen credit card details, fraudsters make purchases, leading to significant financial losses and damaging chargeback ratios for merchants.

A particularly alarming trend for the ecommerce industry is the rise of authorized fraud. Our 2025 Fraud Report revealed that ecommerce platforms suffer from this type of scam at a rate 18 times higher than the global average. This occurs when a user is tricked into completing an identity verification session, often through social engineering, giving fraudsters access to their accounts.

AI: A double-edged sword in fraud prevention

Artificial intelligence is revolutionizing the fraud landscape, presenting both challenges and opportunities. On one side, the accessibility of AI-powered tools has fueled a rise in sophisticated attacks. Over 60% of fraud professionals report an increase in AI-driven fraud attempts targeting their platforms, as generative AI enables the creation of synthetic identities and deepfakes with alarming ease.

On the other side, AI and machine learning are proving to be formidable allies in the fight against fraud. Businesses are leveraging these technologies to stay ahead of evolving threats. Research shows that 64% of U.S. ecommerce companies already use AI/ML for fraud prevention, with another 20% planning adoption within the next year. These systems excel at:

• Detecting complex fraud patterns and anomalies.
• Accelerating the identification of sophisticated fraud attempts.
• Automating customer verification processes.
• Analyzing behavioral data to flag unusual activity.

Veriff’s approach exemplifies the power of AI in fraud prevention. By combining cutting-edge AI with human expertise, Veriff has developed a layered system called Enhanced Document Support. This framework integrates large language models, mathematical forensics, and legal intelligence to detect fraud at scale. Their strategy merges AI’s precision with human insight, creating a resilient defense against emerging threats.

In an era where fraudsters innovate rapidly, businesses must adopt a proactive, AI-driven approach to safeguard digital trust. As Veriff demonstrates, the fusion of technology and human intelligence is key to staying one step ahead.

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The IDV advantage: Meeting customer and regulatory demands

Identity Verification (IDV) is no longer just a best practice; it’s a customer expectation. A staggering 75% of consumers believe IDV is important when signing up for an online marketplace. Businesses that prioritize robust security not only protect themselves but also build customer trust and loyalty.

Forward-thinking ecommerce companies are already reaping the benefits. A vast majority (83%) have adopted IDV and biometrics, with 81% planning to increase their reliance on this technology. The results speak for themselves. For example, by integrating Veriff’s IDV solution, JTI Philippines saw a 223% increase in customer conversion rates by streamlining its age-verification process. Similarly, The Pro’s Closet (TPC), a marketplace for pre-owned bikes, enhanced its operational efficiency and reduced fraud risk by automating seller verification.

Beyond customer demand, regulatory requirements like the INFORM Consumers Act in the U.S. mandate that online marketplaces collect and verify information for high-volume sellers. Partnering with an IDV provider is the most effective way to ensure compliance while maintaining a seamless user experience.

Building your trust stack: A multi-layered strategy

Effective fraud prevention requires a multi-layered approach—a “trust stack” designed to build confidence at every stage of the customer journey.

• Identity Verification: This is the foundation. By verifying that users are who they claim to be, you establish a baseline of trust for all transactions. Veriff’s solution combines document verification and biometric analysis to confirm a user’s identity quickly and accurately.
• Robust security: Protect customer data with essentials like secure server connections, data encryption, and two-factor authentication.
• Transparency: Be clear about your policies, processes, and fees. Accountability inspires confidence and reassures users.
• Social proof: Online reviews and testimonials are powerful trust signals. Research shows that nearly 95% of shoppers read reviews before making a purchase.
• Consumer protection: Implement clear refund and return policies to protect customers when things go wrong.

Preparing for the future with Veriff

As fraud tactics evolve, Veriff continues to lead with proactive innovation. Our CrossLinks technology identifies fraud patterns across a global network—detecting reused credentials or AI-generated identities without sharing personal data. Combined with advanced liveness detection and document authenticity checks, Veriff’s platform helps businesses stay ahead of deepfakes, digital manipulation, and emerging identity threats.

A powerful example of this innovation in action is Veriff’s partnership with A1 SolarStore, a digital-first marketplace operating across the U.S., Caribbean, and Europe. Facing an uptick in chargeback and shipping-redirection fraud due to high-value orders, A1 SolarStore needed a solution that could be deployed quickly and scale globally. By integrating Veriff’s AI-driven identity verification system, the company achieved a 100% reduction in chargeback incidents, effectively eliminating fraud while improving the experience for legitimate customers through frictionless verification. The partnership demonstrates how advanced IDV and AI—when strategically implemented—can safeguard ecommerce platforms even during high-risk shopping periods like Black Friday and Cyber Monday.

The foundation of secure digital commerce is trust. By integrating AI, biometrics, and responsible verification systems like Veriff’s Age Estimation, businesses can protect their users, meet compliance requirements, and deliver seamless customer experiences built on safety and integrity.

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As U.S. data privacy laws for financial services tighten, are you ready to make compliance a competitive edge? Financial institutions face challenges with federal (GLBA, FCRA) and state (CCPA, VCDPA) laws, urging them to enhance their privacy frameworks. It’s about protecting personal financial and consumer data, empowering clients, and building trust. This article explores strategies for staying compliant and strengthening customer loyalty in a privacy-focused world. Ensuring that financial data reporting is correct is crucial for compliance and protecting consumer rights. Don’t just comply—lead the way.

Why privacy, and why now?

Privacy regulations are rapidly evolving across the United States, exposing businesses to a myriad of compliance, operational, and financial risks. Over recent decades, federal laws and state laws have emerged to shield individuals’ personal information from exploitation.

Privacy regulations are coming into force across the United States throughout 2025 and beyond, and these regulatory changes expose organizations to numerous compliance, operational, and financial risks. Over the last few decades, a wave of privacy legislation worldwide has been building, as individuals and governments have taken steps to safeguard their sensitive data and private information in an increasingly digital world. The cost of identity theft, the prevalence of data breach(es), children’s online privacy, consumer requests, and an increased awareness of how private information can be exploited, sold, and stolen have driven national and international regulatory scrutiny into the data collection, data safeguards, and data processes that organizations (including government agencies) have established around individuals’ private information.  The Gramm-Leach-Bliley Act (GLBA) Privacy Rule requires financial institutions to disclose their data-sharing practices and set up controls to protect consumer privacy. The Fair Credit Reporting Act (FCRA) ensures accuracy in credit data handling. Still, these federal laws address only very specific aspects of personal data processing. Without a unifying federal privacy law like the American Data Privacy and Protection Act (ADPPA) bill tried to introduce, individual states are leading the charge with tailored privacy frameworks.

Today, states have identified additional areas of trade that require privacy regulation, and without a unifying federal law like the ADPPA bill introduced, they have taken steps to introduce state-level privacy bills.

Margot Arnus Senior Privacy and Product Legal Counsel, Veriff

Key areas of privacy class action 

Privacy class action lawsuits remain a significant and growing risk for businesses operating in the United States.

Organizations risk exposure to class actions related to:

• Unauthorized access and misuse of biometric data (e.g., BIPA)
• Unauthorized text communications (TCPA)
• Call recording without consent (CIPA)
• Tracking video consumption (VPPA)

Further, tools like cookies and chatbots have drawn scrutiny under state privacy laws, especially when consumer data is leaked due to poor security measures.

Digital surveillance practices—such as the use of cookies, pixels, chatbots, and “session replay” tools—are especially scrutinized by regulators and plaintiffs alike. Under the CCPA, for example, companies may face private lawsuits if a data breach occurs due to insufficient security measures. The consumers can seek damages up to USD 750 per incident.

The finance sector remains one of the top industries to be targeted under CCPA claims. This evolving litigation landscape reinforces the importance of strict compliance with privacy regulations. Businesses that fail to adopt proactive data protection measures not only risk financial penalties but also significant reputational harm.

Key provisions of state-specific privacy laws in financial services

• Data protection: Financial services must secure customer information and personal data using encryption and safeguards that prevent unauthorized access. This is a requirement for financial institutions under GLBA, and also emphasized by many state laws. Veriff’s identity verification solutions support compliance, protect personal information, and help to maintain audit trails—key in case of regulator inquiries.
• Consumer rights: Modern privacy laws grant consumers rights to access, correct, or delete their personal and financial information. States like Virginia, Utah, and Colorado require clear privacy notices, opt-outs for marketing, and detailed vendor contracts. The Texas Data Privacy and Security Act (TDPSA), effective July 2024, impacts contracts between financial services and third-party service providers.
• Opt-out mechanisms: Clear, easy opt-outs for the use of consumer data in marketing or analytics are now a must. Companies must honor users’ choices and provide controls that reflect the protection act intent of the law.

The importance of compliance for financial institutions

Compliance with state-specific privacy laws is not just a regulatory issue—it’s a vital part of the value proposition for financial services companies. Financial institutions have the opportunity to differentiate themselves from the competition by demonstrating their commitment to protecting client data and protecting consumers. Non-compliance, on the other hand, can lead to severe consequences, such as fines, reputational damage, and loss of trust. 

Non-compliance with state privacy mandates has a direct financial impact on companies via regulatory fines calculated per violation. For example, Blackbaud, Inc., in a stipulated judgment, agreed to pay $6.75 million to resolve allegations that it violated consumer protection and privacy laws. 

By embedding data privacy into their operations, financial services businesses can build client loyalty and enhance their reputation as leaders in data protection. When selecting a service provider, it’s important that they share your commitment and values.

🎥 Watch this explainer video: What is U.S. data privacy and why does it matter?

This short video breaks down how U.S. data privacy laws are evolving and why financial institutions must act now to stay ahead. It’s a great complement to our comprehensive guide.

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The role of Identity Verification in financial compliance

Identity verification is essential in complying with laws that protect consumer rights and guard against unauthorized access. Advanced tools from Veriff help verify identities accurately while preserving personal information integrity and privacy.

Such tools automate checks, create audit logs, and assist with compliance with both federal laws and state laws, including the Fair Credit Reporting Act (FCRA) and Gramm-Leach-Bliley Act (GLBA).

With increasingly sophisticated cyber threats, accurately verifying a client’s identity is essential, particularly when processing requests for access, deletion, or modification of personal data. Financial institutions must request access to verify identities for data access requests, ensuring that only authorized individuals can view or modify sensitive information. However, the privacy and data protection aspects must also be taken into account. By using advanced identity verification solutions, such as those provided by Veriff, financial institutions can securely confirm identities, mitigating fraud and ensuring compliance with state laws.

These solutions streamline the compliance process by automating identity verification, supporting data protection efforts, and enabling the setting up of audit trails. When it comes to handling such incredibly sensitive data, a competent service provider helps financial institutions to achieve peace of mind. The auditability of these processes ensures that financial institutions can demonstrate compliance in the event of regulatory scrutiny.

Practical tips for financial institutions

Implementing effective security measures is critical for protecting consumer financial information in the United States. 

• Stay informed: Track developments in federal and state laws to remain compliant.
• Invest in technology: Use identity verification, encryption, and monitoring tools to protect financial products and services.
• Enhance transparency: Clearly disclose how you handle personal data.
• Train your team: Ensure staff understand how to comply with regulations and handle consumer data responsibly.
• Conduct audits: Regularly assess systems and practices to prevent unauthorized access and demonstrate due diligence.

Future of US data privacy law

The Federal Trade Commission (FTC) is actively proposing new rules to unify the currently fragmented U.S. approach to data privacy. As states continue to pass or propose comprehensive privacy laws (keep in mind that for example Nebraska, New Hampshire and New Jersey state laws just entered into force in January 2025), and federal legislation efforts gain traction, financial institutions must be ready to adapt.

These evolving frameworks are expected to reshape how businesses collect, process, and protect personal information, especially when delivering financial products and services. In particular, organizations handling biometric data or sensitive consumer details will need to ensure proper consent mechanisms and robust safeguards are in place to comply with both state laws and any upcoming federal laws.

Proactively investing in systems implementing privacy by default principles and privacy by design practices now will help organizations remain resilient amid regulatory shifts, reducing legal exposure, protecting consumer data, and strengthening long-term trust and competitiveness.

Conclusion

In conclusion, US privacy laws are complex and multifaceted, with both federal and state regulations playing a critical role in protecting consumer data. Financial institutions must navigate a range of laws and regulations, including the GLBA, FCRA, and CCPA, to ensure they are taking adequate measures to safeguard sensitive financial information. By staying informed about the latest developments in US privacy laws and working with regulatory agencies, businesses can help protect consumer data and maintain trust in the financial system. As the landscape of data privacy continues to evolve, financial institutions need to prioritize compliance and invest in robust security programs to prevent data breaches and protect sensitive information to regulatory frameworks and requirements.

FAQ

1. Why are U.S. states enacting their own data privacy laws?

Without a comprehensive federal law, states are passing laws to protect consumer data and address the growing threat of unauthorized access and data misuse.

2. What challenges do businesses face with varying state privacy laws?

Operating in multiple jurisdictions means tracking and complying with differing protection act requirements—an evolving task demanding a dedicated strategy.

3. How does the U.S. approach differ from the EU’s GDPR?

The U.S. approach is fragmented—relying on a mix of federal sectoral laws like GLBA or HIPAA, and state privacy laws such as the CCPA, whereas the EU’s GDPR is uniform across sectors and borders.

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Online fraud is a rapidly growing threat in the United States, with criminals increasingly using deceptive tactics to trick victims into harmful actions. These actions often result in financial loss, theft of personal or confidential information, and other damages. Unlike many forms of cybercrime, online fraud involves tricking victims into voluntarily performing these actions. The rise in cybercrime incidents, particularly online fraud, has been alarming. Between 2019 and 2023, the number of cybercrime cases in the U.S. soared from 467,000 to over 880,000, with the financial impact rising from $3.5 billion to an astonishing $12.5 billion over the same period.

One of the earliest known scams in history was the infamous “419 scam” or “Nigerian Prince scam,” which originally emerged in the 1980s as mail fraud. This type of scam has evolved over time, and the internet has made it easier for fraudsters to reach larger audiences with similar tactics.

Phishing: A persistent threat

Phishing is one of the most prevalent forms of online fraud in the U.S. In 2023, there were nearly 299,000 phishing incidents reported to law enforcement. Phishing involves tricking individuals into revealing personal information such as login credentials, credit card numbers, or other sensitive data. Mobile phishing, in particular, is on the rise, with North America being one of the regions most affected. According to recent data, online shopping scams have seen the biggest increase over the past eight years, highlighting the importance of caution when making purchases online. A recommended way to avoid these scams is to research online retailers before purchasing to ensure their legitimacy.

Phishing simulations, where organizations test their employees’ ability to recognize fraudulent emails or links, have revealed the vulnerability of various industries. In 2023, sectors such as business services, consulting, telecommunications, construction, and entertainment showed the lowest resistance rates to phishing attacks, highlighting the need for better cybersecurity awareness and training.

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Business E-mail compromise (BEC)

Another highly damaging form of online fraud is Business E-mail Compromise (BEC). In 2023, more than 21,000 individuals were targeted by BEC attacks in the U.S. In these attacks, fraudsters impersonate a trusted entity, such as a CEO or vendor, and trick employees into transferring money or sensitive information. The financial losses from BEC attacks were significant, amounting to $2.94 billion in 2023, up from $2.74 billion in 2022. BEC scams can lead to severe financial damage; for instance, the largest recorded loss from a single email scam was a staggering $47 million.

Impersonation scams: Targeting brands

Impersonation scams, where fraudsters pose as well-known brands, are also on the rise. Best Buy’s Geek Squad was the most impersonated brand in the U.S. in 2023, followed closely by Amazon. Microsoft was involved in 68% of online brand impersonation incidents. Impersonation scams often exploit cryptocurrency payments, and in 2023, they caused $208 million in financial losses through this payment method alone.

Seniors targeted by scams

Fraudsters often prey on the most vulnerable groups, and seniors in the U.S. are frequently targeted. In 2023, individuals aged 60 and older filed the highest number of cybercrime complaints, which included various types of online fraud. This age group also faced the highest financial losses, which totaled $3.4 billion. The most reported form of cybercrime among seniors was tech support fraud, but the most financially devastating were investment scams.

A key tip for avoiding scams like computer software service fraud is to never let someone take control of your computer unless you’re absolutely sure of their legitimacy.

Changing landscape: Social media & AI

The nature of online fraud is evolving, with social media now playing a significant role in scam encounters. Social media platforms have become the most common avenue for costly scams, with online shopping frauds being particularly prevalent. Additionally, the rise of generative AI has made it easier for fraudsters to create convincing deep fakes, further complicating the detection of online fraud.

Key tips for financial services to combat online fraud

Financial services organizations are prime targets for online fraud due to the sensitive nature of the data they handle and the high volume of transactions they process. To effectively combat the ever-evolving threat of online fraud, financial services companies must adopt a multifaceted approach that includes technological advancements, customer education, and strong security measures.

Here are some key strategies:

1. Implement Multi-Factor Authentication (MFA)

To reduce the risk of unauthorized access, financial institutions should implement Multi-Factor Authentication (MFA). MFA adds an extra layer of security by requiring users to verify their identity through multiple methods, such as a one-time code or biometric authentication. This makes it harder for fraudsters to exploit stolen credentials.

2. Leverage Artificial Intelligence (AI) and Machine Learning (ML)

Financial services can benefit greatly from AI and ML technologies. These tools analyze large datasets to detect patterns and anomalies that may indicate fraudulent activity. AI-driven systems can provide real-time alerts on suspicious transactions, making it possible to prevent fraud before significant damage occurs.

3. Enhance customer education and awareness

Fraudsters often rely on tricking individuals into sharing sensitive information. Educating customers on the latest fraud tactics, such as phishing and impersonation scams, can help prevent such attacks. Regularly share cybersecurity best practices, such as avoiding suspicious links and verifying requests for sensitive information.

4. Deploy advanced fraud detection solutions

Financial services should invest in advanced fraud detection solutions that use biometric authentication, AI, and data analytics to identify suspicious activities in real-time. These systems can monitor account activities, detect unauthorized access, and block fraudulent transactions before they occur.

5. Adopt strong data encryption and secure communication channels

Securing data and communication channels is critical in preventing fraud. Financial services must use strong encryption protocols to protect sensitive customer information during both storage and transmission. All digital platforms, including mobile apps, should employ secure HTTPS connections to safeguard against data breaches.

6. Monitor and block business e-mail compromise (BEC) attempts

Financial institutions must be vigilant against BEC attacks by implementing email verification protocols, such as DMARC (Domain-based Message Authentication, Reporting & Conformance), to prevent fraudulent emails from reaching employees. Training staff on how to spot suspicious emails and verify financial requests is crucial.

7. Strengthen vendor and partner security

As third-party vendors can introduce security risks, financial institutions should implement strict vendor management protocols. Regularly auditing the security practices of partners and requiring them to adhere to the same cybersecurity standards helps minimize potential vulnerabilities.

8. Use Identity Verification and KYC processes

By implementing strong Know Your Customer (KYC) procedures, financial services can verify the legitimacy of their customers and reduce fraud risk. Automated identity verification solutions that use biometrics and government-issued ID checks can help prevent fraudsters from creating fake accounts or engaging in unauthorized transactions.

9. Implement transaction limits and alerts

Setting transaction limits and sending real-time alerts for high-risk transactions, such as large fund transfers or payments to unfamiliar accounts, can help detect and block fraudulent activity early. Customers should be immediately notified of suspicious transactions.

10. Collaborate with law enforcement and fraud networks

Collaboration is key in the fight against online fraud. Financial institutions should work closely with law enforcement agencies and participate in fraud detection networks to share information about emerging threats and fraudulent schemes. This collective intelligence can help prevent fraud on a larger scale.

Conclusion

The online fraud landscape is constantly evolving, but financial services can significantly reduce their risk by adopting a combination of technological solutions, customer education, and internal security measures. By staying proactive, leveraging AI-powered fraud detection, and maintaining strong communication with both customers and law enforcement, financial services organizations can protect themselves and their customers from the growing threat of online fraud.

How Veriff can help fight fraud

As online fraud continues to grow, businesses need reliable solutions to protect their customers and their own operations from cybercriminals. Veriff, a leading identity verification platform, is well-equipped to help financial services and other industries in their fight against online fraud. Here’s how Veriff can provide crucial support:

1. AI-Powered Identity Verification

Veriff uses advanced artificial intelligence (AI) and machine learning (ML) technologies to verify the identity of users in real-time. By analyzing biometric data, government-issued IDs, and behavioral patterns, Veriff can quickly and accurately detect fraudulent attempts to create fake accounts or perform unauthorized transactions. This helps prevent fraud at the point of onboarding and ensures that businesses are dealing with legitimate customers.

2. Comprehensive KYC & AML Solutions

Veriff’s Know Your Customer (KYC) and Anti-Money Laundering (AML) solutions help financial services comply with regulatory requirements while preventing fraud. By automating the verification process, Veriff enables businesses to identify high-risk customers and ensure that they meet compliance standards, reducing the risk of financial crimes like money laundering and fraud.

3. Fraud Detection & Prevention

With Veriff’s real-time fraud detection tools, businesses can identify suspicious activity during the verification process. Veriff’s technology detects anomalies such as document forgery, synthetic identity creation, and deepfake attempts, enabling companies to flag and block fraudulent transactions before they cause harm.

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Document fraud is one of the biggest dangers today regarding online fraud. What exactly is the threat – and how can it be prevented? 

Document fraud is often the type of identity fraud that leaps to mind first – whether it is tampering with an existing identity document or an entirely fake identity document. Fraudulent documents often exist in the form of fake IDs for a specific real-world application – such as gaining access to something you’re underage for – but online, there is normally more skill that goes into their creation. They look to serve a monetary purpose, frequently offering some form of financial bonus for inviting more users to a site.

So, let’s look at both examples.

2. Tampered documents

There are various methods of tampering, but the result always includes slight alterations made to a legitimate document in order to partially or entirely change the holder’s identity. Forgeries include but are not limited to:

• Altering or replacing the document image
• Overwriting document data with a pen, pencil, or other simple tools
• Adding/removing specific document data or elements

3. Fake documents

While tampered documents are usually counterfeited original documents, fake documents include manipulations that try to imitate the appearance of a legitimate-looking document but, in reality, are reproductions of the original. Such forgeries might come in the form of:

• Alterations of government-issued document specimens that are publicly available
• Premade templates with inserted fake photos and document data
• AI-Generated document fakes 

According to the Veriff Identity Fraud Report 2024, there was a 20% rise in overall fraud year-on-year from 2022 to 2023. A significant chunk of fraud in 2023 – 13.7% – was specifically document fraud, almost double the proportion in 2022, when it sat at 7.65%.

Within the broader category of identity fraud – the biggest challenge facing our customers – document fraud ranked second to impersonation, comprising 1.04% of all verifications in 2023. In sectors like gaming, where identity fraud reigns supreme, the prevalence of AI-generated document fakes exacerbates the challenge. 

What impact does this have in the real world? Let’s take the gaming sector as an example. Our identity fraud report found that identity fraud was the most prevalent fraud type in this vertical in 2023, with more than 10% of all verification attempts stemming from this danger, including altered or counterfeit document submission attempts. It’s clear that fraud detection is a vital priority. 

4. AI-generated document fakes

Unfortunately, the rapid advancements in generative AI technology have opened up new avenues for fraudsters to exploit. We are now seeing a concerning surge in AI-generated identity fraud, where bad actors use these powerful technologies to create highly convincing fake documents and entirely new identities out of thin air. 

In our recent blog post on “How generative AI is driving an increase in online fraud,” we highlighted the alarming scale of this problem. A MwAre study found that 66% of cyberattacks involved deepfakes in 2023, and SlashNext reported a 1,265% increase in phishing emails since the launch of ChatGPT, as scammers use generative AI to generate highly personalized and believable messages. Criminals are leveraging generative AI to generate synthetic identities, fake IDs, and even deepfake videos to bypass identity verification measures.

Our CEO, Kaarel Kotkas, has recently shared in his LinkedIn post about how fraudsters are capitalizing on these new AI technologies. He mentioned one such service that allows users to generate fake documents in just a few clicks using generative AI: 

“Today, getting a fake ID on the internet requires a few minutes or impersonating someone else using deepfakes. Those tools have been around for some time, but now being more accessible than ever.”

The rise of generative AI is a double-edged sword – it has the potential to drive incredible innovation but also enables new and more complex forms of fraud that pose a major challenge for both individuals and organizations.

For more information on the dangers of generative AI and online fraud, check out our previous post  “Identity fraud: the growing AI threat”.

Today, getting a fake ID on the internet requires a few minutes or impersonating someone else using deepfakes. Those tools have been around for some time, but now being more accessible than ever.

Kaarel Kotkas

5. How do we detect document fraud in Veriff?

Document fraud prevention has always been, and always will be, one of Veriff’s top priorities. Veriff employs a layered approach to detecting document fraud; these features complement each other, increasing our defense, particularly against generated fake documents.

Customers like Easygo / Stake.us  are under constant attack from fraudsters who were also bombarding the website with fake ID documents, slowing down Stake.us’ entire verification system and seriously impacting the customer experience of bone fide customers. However, partnering with Veriff put a cap on the document fraud issue. It immediately cleared its backlog and offered near-real-time validation from that point forward. 

Our proprietary specimen database plays a key role in ensuring the accuracy of document fraud prevention. It contains more than 12,000 identity and government document specimens from over 230 countries and territories. With our comprehensive document database, we possess a clear understanding of the standard appearance of documents. By meticulously cataloging their attributes, we streamline the process of identifying any deviations or suspicious elements, enabling efficient detection of anomalies. The database is updated daily as we carry out extensive document-related research (i.e., we find official specimens, information related to the issuing terms, etc) and cooperate with government authorities across the world.

In addition to our specimen database, we employ a variety of checks to validate the legitimacy of documents. This includes leveraging machine learning algorithms to analyze document features and detect anomalies or signs of manipulation in:

• Document material integrity
• Portrait photo 
• Data cross-referencing 
• Format validation
• Data dependencies 
• Document font 

Learn more about our core AI-powered checks as part of our Fraud Protect fraud mitigation package. 

Additionally, Veriff’s fraud prevention engine plays a crucial role in document fraud detection and prevention. The key elements to stopping repeat offenders are device and network fingerprinting that is used in CrossLinks. CrossLinks enables Veriff to group sessions that share similar data points and analyze them together instead of viewing them as standalone attempts. For example, sessions submitted by the same person, on the same network, with the same device, and/or using the same document. All the insight and intelligence that gets generated through the existing features is shared via API  as part of our Fraud Intelligence fraud mitigation package. We also use both manual and machine learning-driven processes to continuously monitor incoming traffic for anomalies. This way, we can identify clusters of traffic that are indicative of organized fraud attempts. 

Observing that technology continuously evolves and becomes more widespread, some of the tools previously considered science fiction tools, such as deepfake generators, audio modulators, or document generators, today have become common for enthusiasts and fraudsters. We at Veriff understand that fraud, by nature, is never static. Neither can the techniques and innovation that go toward detecting it, which prompts us to do continuous research on emerging fraud trends, working along with our internal teams as well as our customers to track, identify, and stop various known fraud vectors as well as focusing on problems that we might be facing in the future.

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The post Unveiling the threat: A deep dive into document fraud [2024] appeared first on Veriff.

However,. with advanced technologies like identity verification software (IDV), you can stay ahead of the fraudsters. 

The growing danger is clear to see. Veriff’s Identity Fraud Report 2024 found a 20% rise in overall fraud year-on-year from the previous report in 2023. Of the verification attempts we processed over the course of 2023, a worrying 6% were fraudulent.

So, how can you build your defenses against online criminals? Fraud detection software in IDV and beyond provides a crucial advantage.  

1. The threat from modern fraudsters

Fraud detection tools are vital for stopping fraudulent activity from taking place. But how could such fraudsters target your business and its customers? 

There are numerous approaches fraudsters use to gain access to your business using false or manipulated details or pretending to be a genuine customer, which could include:

• Stealing or manipulating someone’s genuine identity
• Producing fake ID cards
• Obtaining documents like a passport or a driving license in someone else’s name
• Deceiving a genuine user into performing an IDV session
• Conducting ‘man-in-the-middle’ attacks, perhaps through criminal efforts like tech support scams
• Take over someone’s account using their password
• Use phishing or smishing messages

2. Fighting back: fraud detection software 

To protect your business against such activity, fraud detection software is key, fortifying your business and protecting your customers. Cutting-edge solutions can thwart criminals, preventing them from infiltrating your business and assets. 

What’s more, such tools can help build your reputation for security, instilling confidence in your business and helping to fuel future growth. 

So how does it work? Let’s look at IDV, a vital form of fraud detection software. 

3. IDV and onboarding

As the name suggests, IDV software is used to check and confirm a person’s identity. In doing so, it can detect fakes and documents that have been tampered with. 

How does this work in practice? To verify the identity documents of real people, Veriff’s IDV solution asks the user to take a picture of their identity document. The solution automatically detects whether it’s a driver’s license, passport, residence permit, or standard ID. It assists the user through the process, making the experience seamless. The user’s ID is then verified, and their selfie is checked against the portraitprotrait image from the identity document for likeness and liveness. 
This identity verification solution can reach a decision in around six seconds, meaning users enjoy a swift, secure, and minimal friction experience.

4. Verifying the identity of returning users

On top of this, fraud detection tools can also be used to verify the identity of a returning customer. Such fraud prevention tools use facial biometric analysis to validate that a returning user is exactly who they’re claiming to be. In doing so, these tools use a selfie-based biometric authentication that’s far more secure than using a password or one-time passcode.

5. Case study: Deel 

Deel is the leading payroll and compliance platform for international businesses. With more than 4,500 organizations using the platform in over 150 countries, it partnered with Veriff to ensure the highest level of security against fraud.

The partnership adds an extra layer of safety and security to Deel’s online platform, meaning organizations can now quickly, easily, and securely verify the identity of employees or contractors as part of a hassle-free onboarding process. Since Deel processes payments, Veriff also helps it meet know your customer (KYC) requirements, a key element of fraud detection. 

“Identity verification is critical, especially when providing a reliable and secure experience for our customers online,” said Dan Westgarth, COO at Deel. “Veriff’s ongoing commitment to providing the highest quality IDV makes the partnership one we’re excited for, especially as we continue to offer more robust and complex offerings.”

6. Challenges of fraud detection softwares

There are plenty of fraud detection software options on the market. However, they face a range of challenges. You must ensure your solution is fit for purpose and that real-time anomaly detection is a given, not an optional extra.

What are the potential obstacles your software tools must handle?

• False positives: These occur when genuine user sessions are flagged as fraudulent, leading to unnecessary investigation or rejection of valid sessions. High false positive rates can lead to customer dissatisfaction and increased operational costs
• False negatives: Conversely, false negatives occur when fraudulent activities go undetected by the software, allowing fraudsters them to proceed unchecked. This can result in financial losses and reputational damage
• User experience: Although essential for safeguarding businesses and their customers, fraud prevention measures frequently result in a less-than-optimal customer experience. While strong controls can effectively stop fraudulent activities, they can also create difficulties for legitimate users who are trying to access services or platforms. Achieving the appropriate equilibrium between preventing fraud and ensuring a positive customer journey remains a persistent challenge for numerous enterprises. 
• Complexity: Fraudsters continually evolve their tactics, making fraud patterns increasingly complex and difficult to detect. Fraud detection software may struggle to keep pace with these changes, leading to gaps in detection capabilities
• Data quality: The effectiveness of fraud detection software relies heavily on the quality of the data it analyzes. Incomplete, inaccurate, or outdated data can lead to erroneous conclusions and missed fraud signals
• Overreliance on rules: Many fraud detection systems operate based on predefined rules or thresholds. While this approach can be effective in capturing known fraud patterns, it may struggle to detect novel or sophisticated fraud schemes that don’t fit within the rules
• Adversarial attacks: Fraudsters may actively seek to circumvent detection systems by studying their algorithms and exploiting their weaknesses. This can lead to adversarial attacks designed to evade detection, undermining the effectiveness of the software
• Privacy concerns: Fraud detection software often requires access to sensitive  data related to the user, thier device, the nework they are using, etc. to effectively identify fraudulent activities. However, collecting and analyzing such data can raise privacy concerns

7. Key considerations for a fraud detection platform

With the right fraud detection software, you can address these challenges and detect suspicious activity in a secure and seamless manner. The right solution should be adaptable, advanced, and built to respect user privacy while ensuring their security. 

So, what exactly should it look like? 

• The ideal IDV solution should have  built-in fraud detection capabilities  prioritizing security. However, it shouldn’t sacrifice speed, ease of use, and accuracy.
• It’s vital to build security in the long term by sharing insights throughout the organization. For example, Veriff’s Fraud Intelligence platform produces risk insights and intelligence to help inform your decisions, offering risk scoring tools to enhance protection  
• Solutions that automate identity verification processes, provide real-time feedback, and maintain high accuracy rates are instrumental in ensuring seamless user experiences and robust security measures.
• Solution should involve partnering with a vendor with in-depth knowledge in fraud mitigation,  a comprehensive understanding of global identity documents, and a commitment to continuously enhancing their fraud detection capabilities to proactively address evolving fraud trends and accurately identify and flag suspicious activities.

8. Empower your fraud prevention efforts

Arm your business with the right fraud detection platform to combat evolving threats and safeguard your assets. Schedule a consultation with Veriff today to explore how our advanced fraud detection solutions help businesses keep up with the ever-changing threat.

Download our Identity Fraud Report 2024 now to access comprehensive insights and equip your business with the tools needed to combat fraud effectively.

The post Unveiling the power of fraud detection software: Safeguard your business in the digital era appeared first on Veriff.

Indeed, almost since the birth of the internet, criminals have been using the anonymity of the online environment to commit fraud. The following are just a few significant examples that severely damaged the affected businesses. 

Facebook and Google fall for $100m fake invoice scam

Business email compromise (BEC) is an issue for firms of all sizes, with even the biggest names vulnerable to becoming the victims of a well-crafted scam – and the methods don’t necessarily have to be technologically sophisticated. 

Between 2013 and 2015, Facebook and Google were duped out of over US$120m by a Lithuanian man who sent a series of fake invoices to the two tech giants. Having noticed that both organizations used the Taiwanese infrastructure supplier Quanta Computer, Evaldas Rimasauskas registered a company in Latvia with the same name. 

Over the next two years, he sent a series of phishing emails to Facebook and Google employees containing forged multi-million-dollar invoices, accompanied by contracts and letters that appeared to have been signed by the company’s senior executives. He then transferred funds paid to bank accounts in the fake company’s name to further accounts in Latvia, Cyprus, Slovakia, Lithuania, Hungary, and Hong Kong.

The scam was eventually discovered, and following legal action, Rimasauskas was sentenced to five years in prison. However, only around half of the stolen funds were recovered. 

Sony hack is not a pretty picture  

Often, the reputational and operational cost of online fraud on a company can be just as severe as any direct financial loss. 

When in 2014 Sony Pictures suffered a huge data breach, the attack was tracked back to a series of phishing emails sent to top Sony executives months earlier. These were seemingly made to look like requests relating to Apple IDs and directed the executives to a bogus site that captured their login credentials. This information was then used to access 100 terabytes of sensitive data, including details about employees and their families, private correspondence, and information regarding then-unreleased films. At the same time, the attackers erased Sony Picture’s IT infrastructure and posted yet-to-be-released films online.

Experts estimated the overall cost to the company at up to US$100m. This included the cost of lost productivity, internal investigations, replacing or repairing computers, steps required to prevent future attacks and the loss of trade secrets, as well as the impact on parent company Sony’s reputation, for a perceived failure to safeguard information. 

Deepfake vishing lands a huge catch

One of the most alarming recent trends is the deployment of AI by hackers, including the use of ‘deepfake’ voice technology.

The first significant case came in March 2019, when an executive at a UK-based energy firm was duped into believing he was speaking on the phone to the CEO of the firm’s parent company.  In response to his fake boss’s urgent request, he transferred US$243,000 to a fraudulent account.

That may seem like a lot of money, but it pales into insignificance next to the figure stolen in a ‘virtual bank heist’ in Hong Kong in early 2020. On that occasion, a bank manager received a call from the director of a company he’d spoken to before – or so he thought. The voice told him the company was about to make an acquisition – a claim supported by emails in the manager’s inbox from both the director himself and a lawyer apparently hired to oversee the transaction. As a result, the bank manager authorized transfers to the tune of US$35m. Unfortunately, the call was part of an elaborate plot involving at least 17 individuals, as part of which “deep voice” technology had been used to clone the director’s speech.

Keeping one step ahead of the fraudsters

What all these examples have in common is the use of deception and false identities to trick businesses into allowing bad actors to gain access to sensitive information, like the social security number. With more and more sensitive information accessible via the internet, being sure somebody is who they say they are online is more critical than ever. 

Our own data shows that nearly 1 in 10 of the identity checks we carried out between January and October 2022 identified fraudulent activity – of which more than half involved identity fraud. Relying on legacy approaches leaves the door wide open to bad actors – passwords are far too vulnerable to data breaches, while two-factor authentication is too susceptible to device compromise. And with the use of deep fake technology on the rise, even conventional identity verification technology isn’t completely infallible.

Veriff is leading the fight against friendly fraud occur and identity theft, credit card fraud, using stolen credit card information or stolen social security information, and other others of online fraud. We tackle fraud from multiple angles to ensure that fraudsters are caught both in the moment and in recurring attacks and organized fraud rings. As well as examining device, network, face and document information for individual sessions, we use crosslinking to compare this information across thousands of sessions and pick out bad actors through patterns of behavior even when their actions are superficially legitimate. That means we can stop online scamming in its tracks.

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To find out more about how Veriff’s fraud prevention solutions can help you address the threat to your business from bad actors, visit our Fraud Education Center.

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The post How Fraud Happens Online: How Fraudsters Can Damage Your Business appeared first on Veriff.

For better perspective on the growing trends in internet fraud, we spoke to Veriff’s Senior Director of Fraud Prevention and Experience, David Divitt. Divitt offered insight into the rise of ‘AI warfare’ between bad actors and businesses to the collapse of the online user experience; read on to find out more.

Faster services mean faster fraud

“One benefit of digitization is speed – speed to market, speed of services. You can now get your identity validated for a new product in seconds. But faster services mean faster fraud – these things just go hand in hand. So, while faster services are hugely beneficial for society and enable us to do so many more things, they also enable bad actors to commit fraud very, very quickly.”

Prevention is about changing the ROI for the fraudster

“At the end of the day, what you’re really aiming to do is to put more roadblocks in place for bad actors. Basically, change the ROI for the fraudster, that’s the name of the game. Unfortunately, it’s close to impossible to completely stop fraud. But you can make it much less attractive so that fraudsters go elsewhere.”

It’s best to stop fraud before it can get started

“In a digital world, once money is stolen, it can be laundered very efficiently. Once that’s happened, it’s extremely difficult to get it back. So, the best approach is to stop the issue before it can even get started. If fraudsters can’t set up fraudulent accounts, they can’t use them to commit fraud. With effective verification you’re addressing the issue at its root, before it can become a bigger problem.”

Humans are the weakest link in the chain

“Because technology has done such a good job at stopping a lot of fraud, unfortunately fraudsters are now directly targeting the humans involved. The locks on the door are very good, so you get the person who owns the actual key to open the door for you. That’s perhaps the most concerning trend that we’ve seen across financial crime and non-financial crime. People need to be more aware that they are the targets.”

The collapsed user experience is a major issue for legacy authentication methods

“Two-factor authentication, which typically uses a one-time passcode (OTP) sent by text to your mobile, is going to become less and less effective. That’s simply because the intended separation between the two factors often isn’t there anymore – quite often we do things like buying online directly via our phones, so if your device has been compromised, two-factor authentication won’t protect you.”

‘AI warfare’ is increasingly a feature of online fraud

“Machine learning is a powerful tool for fraud prevention, but fraudsters also use this technology. There’s a lot of evidence of bad actors training combative machine learning models using live customers or active fraud detection models. So, you start to get into a kind of AI warfare between the two sides, which is why it’s so important to continue to invest and develop your solution to stay on top of it.”

Fraud can be double trouble for businesses

“For smaller businesses, paying a large invoice to a fraudster can lead to bankruptcy pretty quickly because not only have you lost that money, but you also still have to settle your invoice with the real supplier. So, cash flow right away becomes an issue. Even for larger businesses, if you get hit by fraud, and it doesn’t look like you’ve done everything you can to prevent it, that can have a very bad reputational impact. Not to mention potential fines for legal breaches around money laundering, terrorist financing, human trafficking, and so on.”

The benefits of biometrics

“With effective biometric technology, the collapse of the multi-factor environment becomes less of an issue. It doesn’t matter if a fraudster can intercept a one-time passcode if they can’t prove that the real account holder is physically present in real-time. So, it starts to create a separation of the two factors again. Alongside that, you can have things like a digital ID with biometric security wrapped around it to control access, which creates much stronger security than a simple check of a paper ID.”

The need to swing the pendulum

“There’s what I call an eternal pendulum, which represents the compromise between customer experience and risk prevention. As your business changes, as the fraud landscape changes, and as the customer landscape changes, you’ll want to be able to swing that pendulum back and forth. You can do a lot that’s invisible to your customers by collecting data on how they interact with your services and using this to tune your tools and strategies. But sometimes the friction has to be there.”

A good fraud experience is a powerful thing

“As a consumer it’s surprisingly easy to be scammed and make a mistake that could prove very costly. So, if a business you’re dealing with believes someone might be trying to take advantage of you and they put a pause on things while they clarify the situation, as long as they contact you to let you know, you’re likely to feel they have your back. Businesses that do that well reap the benefits in terms of positive customer relationships.”

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To find out more about how Veriff’s fraud prevention solutions can help you address the threat to your business from bad actors, visit our Fraud Education Center.

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The post The Evolving Threat: 10 Key Online Frauds Shaping the Digital Landscape appeared first on Veriff.

Fraud schemes can be complex and involve multiple steps, taking advantage of anonymity and tax security practices. In some cases, the fraudster may even sell honest customers’ personal information to other bad actors, who can then use it to commit further crimes. It’s not only honest customers at risk, but also the business owners. Legitimate companies are liable to severe financial, legal, and reputational harm if bad actors can illegitimately target big as well as small businesses’ services, submitting fake invoices for wire transfers, sending genuine-looking checks & forcing businesses to optimize their anti-fraud strategies.

However, fraudsters are always innovating to stay one step ahead, from adopting new behaviors like identity farming to embracing technological advances like deepfake video. As a business, it’s important to keep up to date with the latest fraud trends, but also to understand where they fit in established patterns of criminal behavior that change little over time. 

Scams Targeting Businesses

Business fraud can essentially be categorized into four key types: identity fraud, document fraud, technical fraud and recurring fraud.

Identity fraud (Identity theft)

Attempting to appropriate other people’s identities to bypass security measures is easily the most common form of fraud online, making up over half of all fraudulent activity. The most direct form is impersonation, whereby a fraudster uses somebody else’s likeness, bank accounts, phone numbers or identity documents as if they were their own.

Identity fraud can also take the form of third-party intervention, where a fraudster forces, coerces or dupes someone else to gain access to services on their behalf and demand payment. As identity verification (IDV) technology becomes more sophisticated, third-party techniques involving social engineering (using deception to manipulate individuals into divulging confidential information) are becoming popular again.

Document fraud (Synthetic fraud)

As the name suggests, document fraud is the act of altering the information on government-issued IDs or creating fake documents with the aim of defrauding the verification process. Also known as synthetic fraud, this can include the erasure, alteration or substitution of data on the document.

For obvious reasons, synthetic fraud tends to be more prevalent using documents that are less sophisticated in terms of their own security measures and/or from countries where stolen or “borrowed” documents are easier to come by. For example, Veriff’s decline rate for verification sessions using the Philippines national passport is 65.22%, of which 40% are refused due to physical tampering with the document. 

Technical fraud (Scamming)

Technical fraud involves common scams such as attempting to bypass a set verification process – submitting streamed videos for a supposedly live verification session, or fraudulently accessing sessions that were meant for a separate individual. For instance, gift card scamming is becoming increasingly common phenomenon.

With the rise of AI, the use of deepfakes to overcome security based on facial verification and voice biometrics is an emerging trend in technical fraud and avoiding scams is becoming increasingly difficult. 

Recurring fraud (Pattern fraud)

Once bad actors find a vulnerability that enables them to circumvent security measures, they will tend to replicate it as many times as possible. Often attacks will occur against the same target but involve different real users or a series of synthetic identities. On other occasions the same user will try to get approval multiple times using different documents.

As online security measures become more effective, recurring fraud is being exploited by bad actors as a way to maximize their potential gains from any discovered vulnerability. In fact, recurring fraud increased by almost 47% year on year between 2021 and 2022. However, by crosslinking the data obtained from verification sessions it becomes possible to identify patterns and carry out further investigation to isolate this type of fraudulent behavior.

The latest trends

Fraudsters are constantly finding new ways to surface these four main fraud strategies. The following are just a few examples of recent trends we’ve seen. 

Deepfake phishing: The first phishing attacks date back to the commercialization of email in the 1990s, but the potential to create deepfakes using AI threatens to take the technique to a whole new level. Voice impersonation has already been used in highly successful attacks, and it’s likely to be only a matter of time before streaming deepfake video can be used in a similar way.

Identity farming: The tactic of creating one or more fake identities using stolen personal information is becoming increasingly popular and now makes up 9% of all online fraud. Fraudsters from developed countries are often connecting with criminals in poorer locations to obtain stolen or “borrowed” identity documents, or to get them to verify themselves for services for illicit purposes. 

Fake job ads: Scammers place a fake job ad on social media claiming to represent a company. Using information from the CVs supplied, the fraudsters then open accounts on the applicant’s behalf. When identity verification is required, fraudsters send magic links to the victim’s email as part of the ‘hiring process’ to try to dupe them into completing the verification process on their behalf.

Get more details

To find out more about how Veriff’s fraud prevention solutions can help you address the threat to your business from bad actors, visit our Fraud Education Center.

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The post Business Scams Unveiled: A Comprehensive Insight into Fraudulent Tactics appeared first on Veriff.

The Veriff Identity Fraud Report 2023 also reveals that: 

• Document fraud is a massive problem, growing by 79% during 2022. 
• Organized crime groups are ramping up activity with a 49% increase in so-called recurring and pattern fraud across all sectors
• Marketplace attacks are now being launched on an industrial scale. The report reveals that 9% of all identity fraud now involves mass-produced fake identities – a process known as identity pharming. 

So, what steps should marketplaces take to protect their platforms and customers? 

Walking the identity verification tightrope

In theory, online marketplaces can enable marketplace fraud protection – lockdown their platforms, introducing passwords, knowledge-based security questions and multi-factor authentication at every step of the buyer and seller journey, making fraud virtually impossible. This approach, however, would deal a severe blow to user experience, making day-to-day marketplace interactions slow and stressful, and customer onboarding tortuous, increasing churn and drop-off.

Instead, marketplaces need to walk a tightrope, finding the perfect balance between effectively addressing the rising tide of identity theft and fraud, while also delivering the slick and intuitive customer experiences that marketplace users have grown accustomed to. 

Marketplaces that can successfully walk this verification tightrope have a golden opportunity to excel at a time when marketplaces are set to become the world’s biggest ecommerce channel by 2027. To do this they need a verification solution that works with, rather than against, existing infrastructure, while also introducing a fundamental step-change in security.

Seamless and sensitive anti-fraud measures

Seamless and sensitive anti-fraud measures

A solution known as identity verification (IDV) is now at the vanguard of this effort to verify customers in a seamless and sensitive way. This far-more secure approach involves the customer taking photos of government-issued identity documents (ie driver’s license and passport) and then taking a selfie of themselves in real time. Market-leading IDV solutions can complete this verification process in just six seconds.

IDV involves no laborious form-filling by the customer, no manual processing by the marketplace and no long wait times for either party. Customers are also spared the fuss and frustration of being locked out of their accounts because they’ve forgotten their mother’s maiden name or their favorite food.

Market-leading IDV solutions are already achieving game-changing improvements for firms in a wide range of sectors, from finance to ecommerce. Forrester recently analyzed the performance of Veriff’s IDV solution, and found that a company partnering with Veriff:

• Reduced revenue lost to fraud by 20%, saving the company $7.4 million over three years. 
• Enjoyed customer experience benefits valued at $18.4 million by Forrester over three years, and a total return on investment of 195%.
• Could save $11 million over three years, thanks to efficiencies linked to automation.

Don’t let fraud stifle growth and innovation

It is clear that online marketplaces face rapidly deteriorating levels of identity theft and fraud, which threaten to curtail innovation and growth among the poorly prepared. Meanwhile, customers expect speed, convenience, and peace of mind, while assuming that marketplaces will protect them from fraudsters. At the very least, if marketplace users’ expectations are not fulfilled, they will vote with their feet and do business elsewhere. 

Marketplace fraud often takes the form of fraudsters trying to extract personal information or payment methods from victims. This can take the form of stealing credit cards, impersonating seller accounts through a fake email address and asking for financial information. Fraudsters also sometimes ask for gift cards. And, as well as fake email addresses, fraudsters will use Google voice, fake phone numbers and text messages to extract information. The advice to consumers is that if you receive notification of an offer that seems too good to be true – then it probably is. But online marketplaces can also do more to enhance fraud prevention.

All types of marketplaces that harness solutions such as IDV to significantly reduce fraud, transform onboarding and elevate customer experience in general, will enjoy a significant competitive advantage. 

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The post Is your marketplace facing challenges balancing marketplace fraud protection and customer experience? appeared first on Veriff.

Being a 100% virtual entity, neobanks offer key advantages over traditional financial technology and institutions. Removing bricks-and-mortar branches from the equation significantly lowers overheads, making it possible to offer more favorable terms. Meanwhile, freedom from the shackles of legacy infrastructure and established thinking makes it possible to be far more nimble at offering customer-centric experiences. As evidence of this, Capgemini’s World Retail Banking Report 2022 found that 75% of customers surveyed were attracted to FinTech’s fast, cost-effective, and easy-to-use services.

Addressing the trust disadvantage

However, one crucial factor that puts neobanks work at a disadvantage is the trust engendered by face-to-face customer support with customers that their more traditional competitors enjoy. Trust is one of the key pillars of mobile banking, and its ability to drive engagement and increase loyalty directly impacts your bottom line. Previous Capgemini research found that trust outranked price for customers’ choice of bank, underlining the importance of the issue. So, without recourse to direct interpersonal relationships, how can you bridge the trust gap?

To bridge the trust gap, you need to create the kind of seamless online user experience that makes customers feel as supported as if they had a real person ‘holding their hand’.

Chris Hooper

User Experience: The key to unlocking brand trust

As a neobank, your user interface essentially is your brand. That makes effective design a vital tool to help build your relationship with a new client. However, to paraphrase the great Steve Jobs, design isn’t just about look and feel, it’s about how something works. 

To bridge the trust gap, you need to create the kind of seamless online user experience that makes customers feel as supported as if they had a real person ‘holding their hand’. This is particularly important during the onboarding process, when prospective customers are getting their first impression of interacting with your brand. A confusing and complicated user flow or a frustrating identity verification process could be enough to turn a potential new customer into a lost opportunity and a negative review.

Better onboarding through technology

Fortunately, the latest account onboarding systems use sophisticated AI to support customers during the account onboarding process, turning a potential barrier to conversion into a positive engagement tool. For example, Veriff’s Assisted Image Capture technology provides real-time feedback to users that makes sure they get verified on the first try. Verification happens within six seconds on average, moving users through the process quickly and getting them interacting with your products and services.

Veriff also uses a diversified dataset to train facial recognition models so that face comparison accuracy is the same for any ethnicity or document origin. This feature has been invaluable to NALA, a Tanzanian personal finance app focused on addressing the hidden barriers that prevent the African community from accessing traditional financial services and is already used by over 250,000 people. 

These and similar innovations can contribute to a seamless onboarding experience that ensures your new clients start their journey with you engaged and receptive to the full range of mobile banking solutions you offer. 

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