Mitigating New Account Fraud: Reduce Risk and Expand Customer Base with Evolving

Mitigating New Account Fraud: Reduce Risk and Expand Customer Base with Evolving Authentication Solutions

Product Type: Market Research Report
Published by: Javelin Strategy & Research
Published: October 2006
Product Code: R3424-14

Description

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 en-hancement 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 ac-count 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 con-tinue to face pressure from both consumers and from regulators to rein in new account fraud.

Audience: Financial Institutions, Payments Firms and Technology Vendors

Authors: Rubina Johannes, Research Analyst , Bruce Cundiff, Senior Analyst

Contributors: James Van Dyke, President, Stephen Matava-Knighten, Research Associate

Table of Contents

Overview
Primary Questions
Findings and Analysis
New Account Fraud Is Up Dramatically,
Credit Card Issuers Experience Four Times as Much New Account Fraud
Both Consumer and Regulatory Pressures Will Define Anti-Fraud Solutions
Appendix: Section 1: Features of Identity Verification Products; Section 2: Examples of Identity Verification Products
Related Research

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