Bank Fraud Research: Actions Americans are Taking to Protect Themselves from Fraud

Fraud Prevention & Mitigation: Disruptions

Some examples of disruptions in the fraud prevention or mitigation space include Trulioo’s GlobalGateway identity verification platform, SentinelOne’s AI-powered singularity platform, and Kount’s AI-powered selective digital lock solution. The rest of the details on these disruptions were presented below.

1. Trulioo’s GlobalGateway Identity Verification Platform

  • The GlobalGateway identity verification platform from Trulioo enabled the company to be included in the 2020 CNBC Disruptor 50 list.
  • The platform helps companies to comply with regulations, reduce fraud risks, and promote trust and security online.
  • To deliver this, the company relies on a massive number of unique and trusted data sources globally. These sources include emerging economies that don’t have a complete list of identity data.
  • Digital identities provide consumers with safe and private methods to undertake their online communications and transactions. They also provide companies avenues to establish trust with clients, vendors, external parties, and all their networks.
  • The company aims to establish trust, privacy, and inclusion in the digital realm to ensure that all people can take part completely in the digital economy of today.
  • STACK uses Trulioo’s Global Gateway for its member verification process to prevent identity fraud and ensure compliance to various regulations. STACK is an alternative fintech firm.

2. SentinelOne ‘s Singularity Platform

  • SentinelOne provides a machine learning-powered method to ensure that the computers, phones, and various other devices that are part of a company’s network infrastructure are continuously monitored and kept safe from online fraudsters.
  • The company zeroes in on endpoint security as almost all company personnel are now connected to the company’s internet. Some of those employees are even using multiple network-connected devices.
  • This setup makes it more challenging for businesses to keep an eye on their entire network of connected devices. Furthermore, it will also be difficult to track if cyber fraudsters are trying to penetrate the network.
  • SentinelOne’s AI-powered system was specifically developed to determine endpoints and their weaknesses.
  • Its Singularity platform can execute “behavioral models and various modes of protection, detection, and response” throughout the whole network.
  • Due to this new way of preventing cyber fraud, the company was included in the 2020 CNBC Disruptor 50 list.
  • TGIFridays is one of the customers of SentinelOne that utilizes the latter’s AI-powered solution to detect fraudulent instances in its network.

3. Kount’s AI-powered Selective Lock Solution

  • According to a site for payment professionals, the latest breakthrough in digital fraud prevention solutions is the selective lock technique.
  • As more merchants move to online channels to promote and market their products due to the pandemic, fraudsters are now seeing more new access points to commit fraud within these consumer-focused online interactions.
  • As an example, customer loyalty programs that let consumers exchange their rewards points for gift cards are ideal access points for fraudulent attacks.
  • According to the CEO of Kount, a provider of fraud-prevention solutions, constructing the highest digital wall is not the best solution to fight fraud as cybercriminals will most often discover a way to put a ladder against those walls. Furthermore, companies that fortify their security setups too well will most probably deter valid customers due to the additional entry obstacles.
  • The company believes that the key is to balance valid customer encounters with ensuring that the system is smart enough to detect fraudster entry points.
  • The main objective of the company then is to construct a cyber wall in a smarter way to ensure that only desirable users can easily enter the system while keeping the fraudsters out.
  • Given this, the company believes that the best method to counter fraud is to evaluate the end-to-end customer journey to determine ways to build the best security setup in those points in the network where the swarm of cyber fraudsters usually lands.
  • Kount admits that even if this anti-fraud method is easy to visualize in theory, the actual execution is more difficult. It will take the sharing of ideas between systems developers, brand managers, and other relevant resources to bring a holistic system to life.
  • The best solution that Kount can offer to address this is its “Identity Trust Global Network” platform. The network was constructed over 32 billion yearly interactions worldwide.
  • The AI-powered solution can enable the companies to “step back and follow the bouncing fraud ball” as it rolls across the network.
  • The company also emphasized that it is crucial to depend on a robust data network that is powered by AI as one company alone does not have sufficient data to analyze or forecast fraud instances. However, a web of millions of data points involving several industries can enable a better understanding of the risk profiles across these industries.
  • As an example, Kount’s Omniscore is an “actionable safety rating” that is based on insights derived from the platform.
  • Arc’teryx is one of Kount’s customers that uses Kount’s Identity Trust Global Network platform to provide a secure digital shopping space for its customers.

Fraud Prevention: Customer Actions

A poll conducted online in July 2019 found that 92% of U.S. adults have concerns about the security of their personal data online. According to another survey this year, the same percentage of U.S. consumers say that security is important to them. Some things consumers in the U.S. do to protect themselves include finding reputable institutions, paying extra for security, paying for identity theft prevention services, using biometrics, educating themselves, among others. We discuss all these points below.

1. They find reputable and trustworthy institutions and companies

  • One-third of consumers say when shopping online, the retailer should bear the brunt of protecting customers.
  • In a survey by Iovation and Insights West, consumers say their main priority is the trust in an institution when it comes to choosing a financial service provider.
  • Three-out-of-four consumers say that when they are selecting a financial institution, they prefer that security and fraud prevention protections are already in place.
  • Seventy percent say that trustworthiness is the most important factor when choosing an institution. Seventy-five percent of consumers will not buy a product from a company if they do not trust the company to protect their data.
  • If the security and fraud demands of consumers are not met, 2 out of 3 consumers say they are willing to switch companies. Forty percent of consumers say they have closed finance accounts because of security and fraud concerns.

2. They buy more security and fraud prevention services

  • According to Experian, only 30% of consumers shopping in the 2019 holiday season were concerned about identity theft during the holidays. Experian says that it’s most likely due to the increase in the use of fraud prevention and identity protection services.
  • The average person will pay $5 more to ensure their privacy.
  • Since 2015, the security services industry has grown by 3% on average. The industry is now worth around $50 billion. These services include cash and valuables protection, alarms, and detective services.
  • Fifty-eight percent of respondents are willing to pay more for internet-connected products such as smart home speakers, wearables, and home security products if they know that it comes with extra data security and privacy. Most will spend 20% or more for extra security and privacy.
  • In 2018, a Kelley Blue Book survey found that consumers would even spend more on their cars for more security features.

3. Biometrics

4. Customers educate themselves

  • About 74% of consumers would participate in a cybersecurity awareness program if their financial institution offered it.
  • This poll found that consumers between the ages of 18 and 44 are the most likely to attend, while people over 45 are not far behind, at 73%.
  • Studies have shown that public knowledge of data collection practices has increased, with 63% being more aware of how their personal data is being collected (source 17).
  • Seventy percent of consumers in the U.S. say they know what to do when their data is compromised.
  • About a third of respondents in a Cisco survey are “privacy actives”, meaning that they are more willing to act on their privacy, going as far as switching companies or providers.

5. Consumers turn off location services

  • Nearly 40% of consumers say they turn off location services on their phones.
  • In a Manifest survey, about 81% of smartphone users were aware of how to adjust their phone’s location settings. The caveat is that most don’t know that most of their attempts to block their location are meaningless.
  • Around 52% of people who don’t allow location services do so because they feel unsafe with the feature on.

6. Put tape over laptop camera

  • Nearly 20% of consumers put tape over their laptop cameras.
  • In a survey commissioned by HP, nearly 60% of consumers who don’t have camera covers or the ability to turn off webcams physically cover their webcams through the use of tape, sticky notes, band-aids, and even gum.
  • Even though many are aware that their webcams can be compromised, many choose not to do anything about it. For instance, 80% of Boomers are aware of webcam privacy issues, but only 49% do anything about it. Also, the number varies by gender; 59% of males are concerned about their webcams compared to 67% of females.

7. They reset passwords and use password managers

  • According to a survey, 85.5% of respondents say that they request a new password each time they log into a website.
  • Even though many Americans do not use password managers, a growing number do. A study by FICO found that 23% of consumers use encrypted password managers.
  • Other consumers use less conventional means of protecting their privacy with passwords. 42% of consumers use separate passwords for multiple accounts while 17% say they recycle and reuse up to five passwords for all their accounts.
  • It is not for lack of education that Americans do not use password managers or practice proper password management. 72% of Americans in a LastPass survey say they are very aware of password best practices, but they don’t do them due to several reasons, including not wanting to put too much thought into password creation and the fear of forgetting them.
Glenn is the Lead Operations Research Analyst at The Digital Momentum with experience in research, statistical data analysis and interview techniques. A holder of degree in Economics. A true specialist in quantitative and qualitative research.


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