Digital identity fraud is the unauthorized use of someone else’s personal details or credentials to commit fraudulent activities or access accounts. This can include phishing, ransomware, credential stuffing, account takeover, and more. As fraud tactics evolve, financial institutions need a robust fraud prevention strategy to protect their customers and employees.
We understand the unique challenges financial institutions face. That’s why we tailor our fraud prevention solutions specifically to our financial services clients. Identity is central to an effective fraud prevention strategy — our solutions secure identities to ensure both security and an exceptional customer experience, without compromise.
With BeyondID, you don’t have to choose between safeguarding your customers and delivering a seamless digital banking experience. Contact us today to learn how our tailored solutions can elevate your fraud prevention strategy.
According to IBM, the average cost of a data breach in financial services is $5.9M – 28% higher than the global average.
Fraud Prevention FAQs
Fraud prevention is a strategic approach that focuses on detecting, preventing, and mitigating fraudulent activities before they cause financial loss or reputational harm. As digital and mobile transactions increase, fraud prevention becomes more essential.
Since the launch of ChatGPT in November of 2022, there has been a 4,151% increase in malicious emails.
With more online interactions, fraudsters have more opportunities to exploit vulnerabilities, making it crucial for businesses to stay ahead of these threats.
A strong fraud prevention strategy secures digital identities, monitors transactions for suspicious behavior, and uses advanced technologies to proactively identify and stop fraud. This approach helps safeguard sensitive data, protects assets, and ensures business continuity. As the digital landscape evolves, effective fraud prevention is key to maintaining customer trust and securing long-term success. Without it, organizations are vulnerable to significant risks that can impact both their bottom line and their reputation.
Fraud Prevention involves proactive strategies to reduce fraud risk before it happens. Key methods include multi-factor authentication (MFA) to secure user access and policy enforcement to establish strict security guidelines. These measures help prevent unauthorized activities by strengthening defenses at the earliest stage.
Fraud Detection, on the other hand, focuses on identifying and stopping fraud in real time. Techniques like anomaly detection spot suspicious behaviors that differ from normal patterns, while machine learning fraud scoring analyzes historical data to assess the likelihood of fraud. This helps organizations react swiftly to fraud attempts and minimize damage.
Together, fraud prevention and fraud detection create a comprehensive strategy to protect your business from fraud risks.
Common Types of Fraudulent Activities &
How to Prevent Them
DATA BREACHES
Avoiding data breaches starts with implementing strong Identity and Access Management (IAM) measures.
BeyondID’s continuous policy enforcement ensures only authorized, compliant users and devices can access sensitive data.
PHISHING
Deploying phishing-resistant authentication methods helps eliminate password vulnerabilities.
BeyondID’s MFA system prevents attackers from exploiting stolen credentials.
MALWARE
Securing endpoint devices blocks malware from gaining unauthorized access.
Device posture assurance ensures only secure devices connect to your systems, reducing exposure to malware.
Protect Your Organization
Fraud prevention is not only about technology—it’s also about taking proactive measures in your daily life to safeguard your personal and financial information. Here are practical steps to protect yourself:
USE STRONG, UNIQuE PASSWORDS
Avoid using easily guessable passwords like birthdays or common words.
Use a password manager to generate and securely store unique passwords for each account.
ENABLE MULTI-FACTOR AUTHENTICATION (MFA)
Add an extra layer of security by requiring multiple verification steps to access accounts.
Use phishing-resistant MFA, such as biometrics or hardware-based tokens, for enhanced protection.
BE CAUTIOUS WITH LINKS AND ATTACHMENTS
Avoid clicking on links or downloading attachments from unknown or unverified sources.
Double-check URLs for legitimacy before entering sensitive information.
MONITOR YOUR ACCOUNTS REGULARLY
Frequently review your bank, credit card, and online account statements for unauthorized transactions.
85% of the U.S. population are digital banking users in 2024.
How is your Financial Services organization — belonging to the most highly targeted industry for digital identity fraud — prepared to protect customers from a barrage of advanced cybersecurity threats?
eMarketer, 2024
Identity Theft Resource Center, 2024
Build a fraud prevention strategy you can bank on.
Americans lost $43B to fraud in 2023, including $20B lost to modern identity fraud scams.
By bringing identity to the center of your fraud prevention strategy, you can minimize the impact of breaches and reduce the risk of fraudulent activities.
Javelin Strategy & Research, 2023
Instances of fraud devastate trust-based customer relationships in the financial sector. A robust fraud prevention strategy fosters confidence among consumers, supports long-term, trust-based relationships, and strengthens customer loyalty.
Compliance is an essential consideration for every banking business, and non-compliance can result in significant fines and legal repercussions. Infrastructural changes that lend themselves to fraud-prevention also promote continuous compliance.
The financial, reputational, and legal risks associated with digital identity fraud are widespread. Fraud prevention measures can stop fraud before it happens and mitigate damages when it does.
Fraud is reputation-destroying in an industry where reputation is everything. It only takes one breach to undermine consumer trust, deter future business, and create a ripple effect that damages brand integrity long-term.
The best fraud-prevention strategies are built on digital identity. Digital identities inform the most well-balanced user experiences, marrying zero-trust security and personalized touchpoints for a banking experience that lives up to consumer expectations.
With 382,000+ members and $6.5B in assets, TDECU needed a strong zero-trust strategy to protect their members. Read TDECU’s case study to learn more about how they simplified their customer experience, improved their identity security, and fostered a mobile-first customer culture.
