As account opening fraud continues to surge, buyers are facing a particularly difficult challenge: existing fraud management solutions are no longer able to handle the volume and sophistication of the fraud schemes they’re supposed to be mitigating. In Liminal’s latest report, Solving Advanced Fraud in Account Opening, commissioned by Data Zoo, 70% of buyers surveyed reported seeing a significant increase in the volume of fraud they’re facing, the sophistication of attacks, and attacks in new fraud vector areas.
Buyers must deal with regulatory concerns, unique threats, and shifting solutions, meaning they are stretched thin as they navigate the evolving fraud landscape and improve protection and compliance. With that in mind, in order to more effectively mitigate account opening fraud, it’s vital to understand the buyers’ perspective and the tools they need to stop fraudsters.
What Issues are Buyers Facing?
Beyond the increases in the volume of fraud and sophistication of attacks, buyers also voice concerns about how their current fraud prevention solutions stand up to new, AI-driven fraud challenges. The Liminal report found that, on average, 68% of buyers expressed concerns about how solutions stood up against threats like social engineering and rapid attack execution.
Additionally, buyers identified several key types of fraud that their current solutions struggle to contain. At least 40% of buyers surveyed reported that they faced challenges dealing with the following scenarios:
Synthetic Identity Fraud: Detecting fraudsters who use fabricated identities to mimic legitimate customers is increasingly difficult
Know Your Customer (KYC): Managing regulatory compliance while accurately verifying identities creates operational bottlenecks
Application Fraud: Stopping fraudsters from using stolen or fake identities to open accounts remains a critical issue
Money Muling: Identifying accounts facilitating illegal fund transfers and money laundering is a growing challenge
The Liminal report paints a clear picture, showing that buyers are facing challenges in preventing fraud across numerous use cases. What’s more, fraudsters are aware of these challenges and constantly looking to exploit them.
Exploiting Vulnerabilities
Because existing solutions have gaps in their fraud-prevention coverage, buyers are frequently left with vulnerabilities that fraudsters are able to exploit. In fact, many enterprises face situations where they are constantly patching gaps in their system while being aware that other key issues still exist.
In particular, the Liminal report highlights several pain points buyers identified in their fraud-prevention coverage, such as weak data quality and missing analytical capabilities. Fraudsters exploit these shortcomings in a variety of ways. For example, they can create synthetic identities to work around systems without strong data that verifies key attributes.
These gaps are driving many buyers to consider switching solutions – 66% of the buyers surveyed by Liminal indicated that they’re seeking to replace traditional onboarding solutions. So, what should these buyers be looking for when they’re considering new options?
New Solutions
Buyers recognize that traditional document and biometric-based solutions can no longer meet modern verification and fraud challenges. Many of them are shifting towards data-driven
verification methods that integrate advanced analytics, behavioral signals, and market expertise.
On the whole, the Liminal survey shows buyers want to switch to solutions that enhance user experience and improve fraud detection while addressing compliance, scalability, and cost-efficiency. This is where industry-leading solutions come in, particularly those that offer high-quality, authoritative data.
By integrating authoritative data into the identity verification journey, Data Zoo ensures security and privacy, and increases enterprises’ ability to address the evolving nature of identity fraud. Data Zoo’s data integrates seamlessly into existing workflows, strengthening fraud prevention efforts across the wide range of use cases buyers have identified as challenges. Furthermore, to ensure security and privacy, Data Zoo protects user data by implementing appropriate security measures and supports compliance with all relevant data privacy regulations.
Ultimately, combining best-in-class data, advanced analytical capabilities, and market expertise alleviates many of the main concerns buyers face. We’ll take a closer look at the benefits these solutions offer in our next blog post in the series leading up to the release of Liminal’s latest report, Solving Advanced Fraud in Account Opening, commissioned by Data Zoo.
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