Fraud has become a widespread issue in the digital age. The consequences of falling victim to crimes like financial fraud or identity theft can be devastating, costing the average organisation up to 10% of net revenue and the global economy as much as 6.05% of GDP annually. To mitigate the risk of fraud, organisations are increasingly turning to biometric identity verification solutions. Biometrics use unique physiological or behavioural characteristics to verify a person’s identity, providing a more secure form of authentication than traditional methods such as passwords or knowledge-based authentication.
This blog examines six common types of fraud that biometric identity verification can help prevent.
#1 Password-related fraud
Verizon reports that more than 80% of internet-facing infrastructure breaches (such as web and email servers) in organisations are caused by inadequate password protection. Passwords are often the weakest link in security as they can be easily guessed or stolen through phishing scams. Biometric identity verification provides a secure alternative to passwords by using something a person is (such as a fingerprint or facial recognition), rather than something they know (such as a password). By eliminating the need for users to remember passwords, biometric identity removes most commonly the weakest link in an organisation’s security.
#2 Multi-factor authentication (MFA) fraud
Multi-factor authentication (MFA) involves using two or more independent factors to prove identity. While MFA is categorically more secure than single-factor authentication, the continued surge in phishing attacks (which more than doubled from 2019 to 2020) has shown its limits, even against unsophisticated tactics. For example, MFA solutions that use SMS-based one-time passwords can be intercepted by hackers. Biometric identity verification provides a secure and user-friendly alternative to these MFA solutions by combining a user’s mobile device as a token with enterprise-grade biometrics. This provides a strong level of security without adding extra steps to the authentication process.
#3 Re-verification fraud
Re-verification is necessary for certain circumstances, such as when a user has a new mobile device or is locked out of their account. This process might be weak in security as it relies on methods such as password reset links, one-time passwords, and knowledge-based authentication, which can be easily intercepted by hackers. Enterprise-grade biometrics provides a secure alternative to these re-verification methods, as they cannot be forgotten and are not tied to a specific device. This makes them a reliable authentication factor even if a mobile phone is lost, stolen, or replaced.
#4 Digital onboarding fraud
Opening a new account online often requires the validation of a person’s identity, particularly in regulated industries such as banking. With more transactions taking place online, it is important to ensure that customers are not committing fraud. Facial biometrics mitigate the threat of onboarding fraud by matching a selfie of the user to their photo on a government-issued ID. The use of facial liveness detection prevents spoofing attacks by confirming the selfie is of a live person, rather than a photo, digital image, video, or someone wearing a mask. Biometric technology that uses passive liveness detection provides the strongest level of security, as it doesn’t require specific user action, which could be exploited by hackers.
#5 Synthetic identity fraud
Whereas in digital onboarding fraud, fraudsters use an existing identity, synthetic identity occurs when fraudsters create a new identity using a combination of real and fake information, which is then used for malicious activities such as applying for credit, loans, or opening bank accounts. As the synthetic identity may have a clean credit history, this type of fraud can be difficult to detect. Biometric identity verification technology, however, can uncover and prevent synthetic identity fraud by confirming the individual presenting the identity is indeed who they claim to be.
#6 Authorised user fraud
Passwords alone do not prove the presence of an authorised user, only that the person has the right credentials to authenticate against a claimed identity. Biometrics, on the other hand, can prove the presence of the authorised user. This eliminates the risk of unauthorised users accessing sensitive information or systems. Authorised user fraud can be a particular problem in industries such as healthcare, where access to patient information must be tightly controlled. Biometric identity verification solutions can help to mitigate this risk by providing an extra layer of security to ensure that only authorised users have access.
Combating fraud with biometrics
Biometric identity verification is becoming a crucial tool in the fight against fraud in our digital world, while also being overwhelmingly favoured by customers for convenience and peace of mind. As cybercriminals evolve, tech developers are improving the security and durability of biometric solutions to withstand spoofing attacks with liveness checks. At Facephi, we use passive liveness technology for a superior customer experience and provide robust data encryption techniques to ensure customer biometrics cannot be leveraged by bad actors. We also hold iBeta certificates Level 1 and 2 for Presentation Attack Detection, setting us apart as a trusted technology provider in the market.
To learn more about how biometrics can protect your organisation from fraud, click here.