Financial institutions using passwords and PINs are on the edge of facing a surge in Account Takeover Fraud (ATO). Obtaining Personally Identifiable Information (PII) and hacking into bank accounts has become easier for cybercriminals. ATO led to a loss of more than $11.4 billion in 2021 which was a significant increase of 90% from 2020.

ATO drives several repercussions for financial institutions involving reputation damages, money loss, legal proceedings, and customer drop-off. In order to increase security and accuracy within their operations, they need to integrate biometric screening solutions as countermeasures. While fraudsters employ advanced techniques to take over accounts, AI-powered IDV services go otherwise. This blog entails strategies used for this crime and how biometric security measures counter them.

Techniques Used for Illegitimately Taking Over Customers’ Accounts 

Fraudsters steal confidential details of customers such as name, social security number, date of birth, answers to secret questions, and passwords to take over their accounts. Criminals then perform illicit payments, transfer money to their accounts, place orders, and apply for financial benefits. In return, the legit customers are losing their financial rights with high chances of facing legal proceedings. 

Financial institutions using biometric security systems are placing enough precautions in place to counter ATO. By using facial feature verification, voice recognition, and liveness detection, they can ensure that the user is present in the physical world while accessing the account. Biometric screening solutions further ensure seamless registration and secure onboarding. However, criminals are leveraging several fraudulent techniques to exploit the privacy of clients. These strategies further involve:

  • Bot Attacks

Fraudsters create malicious bots to hack financial systems and carry out high-volume brute force attacks. Being an advanced form of breach, it helps criminals bypass biometric identity checks. Both attacks involve the use of highly sophisticated AI/ML technologies that makes their efforts challenging to detect. 

After hacking financial institutions’ records, fraudsters can access thousands of IP addresses. Furthermore, this leads to taking over a huge number of associated accounts. Hence, criminals can steer clear of biometric screening and suspiciousness detection.

  • Phishing Attempts

In order to commit phishing attempts, criminals impersonate legal entities that make their identities believable. By obtaining certain confidential and banking details, imposters easily trick customers by convincing them to disclose information. Furthermore, the use of deepfake attacks enables criminals to make their identities and intentions legit. Insufficient biometric security solutions can aid in helping fraudsters fund terrorism and other illicit activities. 

  • Using Details to Create Combinations

Criminals purchase confidential information from huge data containing dumpsters. These can be either dark web or fraudster-holding databases. This attempt later helped criminals to carry out data stuffing for taking over accounts. By using different combinations, they can get their hands on the right one. Hence, replacing traditional passwords with biometric user authentication has become a liability for financial institutions. 

  • Social Engineering Scams

Fraudsters copy/paste scattered information regarding customers from unprotected databases, open platforms, and social media sites. This leads to social engineering scams where criminals can create log-ins and passwords for hacking accounts. However, with biometric recognition solutions in place, financial institutions can provide additional layers of security during digital onboarding

  • Data Breaches Within Legitimate Sources 

Sophisticated breaching attacks go undetected by traditional fraud prevention measures as criminals. Data theft is among the most common security threats financial institutions are facing while digitizing their operations. Therefore, they require biometric security measures to increase the protection of confidential information and restrict activities leading to ATO.

Biometric User Authentication for Detecting Criminal Activities    

Financial institutions can prevent customers’ exposure to ATO by implementing biometric screening solutions. With advanced authenticity checks, they can further ensure the presence of users during performing a transaction or validating payments. 

In order to enhance security, financial institutions are using biometric security mechanisms that provide additional layers of accuracy. The system asks for a real-time selfie and a thumb impression to grant accounts access. Similarly, along with these, liveness detection, gesture analysis, and ongoing monitoring of financial behavior further increase efficiency in detecting ATO. Ultimately, biometric ID verification protects customers’ from falling into malicious criminal traps. 

After gaining illegitimate authorization of accounts, criminals apply for governmental benefits, avail medical insurance, exploit the reputation of institutions, and increase regulatory scrutiny. Making biometric security solutions a part of their system enables financial firms to allocate services to actual account holders.

Concluding Remarks

Biometric security systems are enabling financial institutions to authenticate customers before authorizing access. This later aided in countering identity fraud and the flow of illicit funds through legitimate institutions. Biometric recognition is replacing passwords, OTPs,  and simple log-in tactics to enhance accounts’ security. Criminals camouflaging documents or forging identity information can not recreate facial features and other biological/behavioral features. Hence, biometric recognition solutions are enhancing financial institutions’ integrity while ensuring higher levels of security.

By Alberta