Data breaches, the rise of the perfect identity and what it all means for credit unions

With the rise of card-not-present (CNP) and mobile commerce and as more and more consumers turn to their smartphones and other online applications to conduct financial matters, credit unions have, in turn, realized many benefits to acquiring more new customers.

However, with every opportunity there are potential obstacles. Recently, data breaches have been widespread making countless identities available for sale on black markets that can be accessed, for example, on the “Dark Web.” The stolen data from these breaches, as well as other identity theft schemes, contains enough personal information on a consumer for a fraudster to accurately impersonate that individual. We call these compromised identities “Perfect Identities.” This is where fraudsters capitalize – they can purchase a perfect identity and attempt to open and access financial accounts, file a tax return, submit a medical claim and so much more. So, how can credit unions be confident that their customer, “John Smith,” really is John Smith and not a criminal with his identity in hand?

By utilizing innovative, multi-layered identity verification and fraud prevention solutions that let you verify, in real-time, someone’s identity. For example, a credit union can escalate a suspicious identity to a photo ID scan and validation solution which also compares the ID to a photo or selfie taken with a smartphone or webcam. Through robust solutions such as this, credit unions can ensure that the customer is good and not a fraudster – and a great alternative way to actually collecting an actual ID.

Credit unions need to ensure that the person opening or accessing an account is legitimate and not a fraudster while also, and more importantly, minimizing friction for good customers. Ultimately, you want to validate the legitimate consumers quickly yet also prevent fraud by creating multiple layers of escalation when potential fraud attributes are present. So, the challenge is ensuring that your identity verification, fraud prevention and regulatory compliance platform is both robust and dynamic. And, can be quickly configured and changed on-demand, if need be, as the fraud landscape evolves.

A robust identity verification and fraud prevention platform that enables dynamic decisioning allows you to have confidence that your customers are who they say they are. By employing innovative solutions that satisfy regulatory compliance like CIP, KYC and address the Patriot Act, credit unions can keep fraudsters out while minimizing friction for legitimate customers.

It’s a win-win for your institution and your customer. Good, right?