As financial institutions increasingly digitize their services, bad actors are expected to exploit new account opening processes to create fraudulent accounts for financial abuse. This form of fraud is a serious threat to banks and can result in severe financial losses for consumers. There are several ways to commit this type of fraud, including inventing information, stealing synthetic identity data or leveraging compromised credentials from a data breach.

New account opening fraud investigation during the account opening process is if the name on the application doesn’t match the name on other government ID documents or social media profiles. In addition, if the new account is being opened using a PO box or other mail drop address this can also raise suspicions. Another red flag is when a fraudster opens a new account and then immediately makes a large cash deposit or withdrawal. Fraudsters know that many of the most important KYC and CDD checks are conducted at weekends or holidays, so they try to make their deposits and withdrawals just before these periods.

Investigating New Account Opening Fraud: Uncovering the Truth

Fortunately, there are many tools available to help teams identify new account opening fraud quickly and effectively. These include passive liveness detection which enables a team to assess whether an individual’s face is present in a selfie they provide. This technology can also be used to detect if an image is being manipulated or computer-generated and can even spot suspicious activities such as blinking.