Fraud is on the rise and is leading to a staggering increase in related losses. In the U.S. alone, consumer fraud losses have skyrocketed from $3.5 billion in 2020 to over $12.5 billion in 2024, according to Federal Trade Commission (FTC) data. In its latest report, Solving Advanced Fraud in Account Opening, commissioned by Data Zoo, Liminal found that 70% of buyers are currently experiencing a significant increase in the volume of fraud, the sophistication of attacks, and attacks in new fraud vector areas.
Account opening fraud is a major contributor to these rapidly escalating losses, with recent advancements in AI making it increasingly difficult for organizations to spot fraudulent activity. This growing threat poses a significant challenge for enterprises and solution providers, and countering it will require new approaches.
Digital Account Opening is on the Rise, and Fraud is Following
Although macroeconomic conditions led to a downturn in new digital account openings from 2022 to 2024, DataZoo’s report reveals that digital account openings are back on the rise. Research shows digital account openings rebounded last year and are expected to grow by more than 13% annually through 2028, significantly increasing chances for new account fraud.
Furthermore, the latest findings from Liminal indicate more than 84% of all new accounts will be opened digitally by 2028. The rapid rise of digital account openings is mirrored by the growth of account opening fraud. In fact, a recent study from TransUnion estimates that a whopping 13.5% of new accounts (1 in 7) opened in 2024 were fraudulent.
While digital experiences have created positive effects for consumers, they’re also creating vulnerabilities for legacy onboarding systems that are ill-equipped to handle the volume and speed digitization demands.
Organizations are Struggling to Contain Account Opening Fraud
As rising digitization has led to increased fraud, account opening processes are particularly vulnerable. Fraudsters are exploiting digital accounts at a pace surpassing current vendor
solutions' capabilities.
Advancements in AI technology have proved to be especially difficult to combat: as fraudsters gain access to tools that allow them to quickly create robust synthetic identities, they’re escaping detection by fraud monitoring systems more often than ever before. Organizations surveyed in Liminal’s report are worried about their ability to keep up with evolving fraud schemes, with 68% of buyers expressing concerns about how solutions stood up against threats like social engineering and rapid attack execution.
The call to action is clear: there is an urgent demand for more adaptive, robust, and innovative security solutions to tackle account opening fraud.
The Path Forward
The challenge of combating new account fraud is daunting, but not impossible. By employing new approaches centered around authoritative data (data containing identity information from the most reliable source available), enterprises and solution providers can begin to effectively counter this growing threat.
Data Zoo works with organizations and utilizes authoritative data at multiple states of a user’s journey. The use of this data in the account opening process acts as a powerful tool to identify inconsistencies that indicate fraud, enabling proactive risk assessment and mitigation. Data Zoo verifies personal data at multiple stages of the onboarding process by checking names, addresses, date of birth, and other key identifiers against authoritative sources.
What’s more, businesses that evaluate and use solutions that have best-in-class data, advanced analytics, and regional and market expertise stand to gain between $50 million to $500 million in returns back from fraudsters and can even help to prevent sophisticated fraud attacks in the future.
With substantial monetary and reputational gains at stake and account opening fraud rising, now is the time for organizations to revamp their fraud-prevention operations.
Keep an eye out for our full blog series exploring account opening fraud as we prepare for the release of Liminal’s latest report, Solving Advanced Fraud in Account Opening, commissioned by Data Zoo.