New account fraud is down partly thanks to selfies
New account fraud based on ID verification declined by 23.2 percent worldwide, year-on-year in 2020 according to a new report from AI-powered identity verification specialist Jumio.
Although selfie-based fraud rates were five times higher than ID-based fraud, this shows the growing number of stolen ID documents available on the dark web and, more importantly, the growing need to determine if an ID is authentic and belongs to the user.
By virtue of requiring an ID and a selfie as part of the identity proofing process, Jumio has seen 80 percent less fraud compared to customers who only required a government-issued ID.
Selfie-based fraud describes fraudulent attempts to use a picture or video instead of a genuine selfie to corroborate a digital identity. The report finds selfie fraud rates were significantly higher than fraud based on just a government-issued ID. Fraud associated with a selfie averaged 7.15 percent globally in 2020, compared to 1.41 percent for ID-only verifications.
The findings do demonstrate the chilling effect that the selfie requirement has on would-be fraudsters who abandon the process before taking the selfie.
"This year's Holiday Fraud Report unearths a number of interesting global fraud trends that enterprises adopting biometric-based identity verification should carefully consider as they architect the new account journey," says Philipp Pointner, Jumio's chief product officer. "It highlights the critical importance of requiring a selfie to corroborate the remote user's digital identity. By including both ID verification and identity verification with live selfies and liveness detection during the account onboarding process, organizations can more effectively deter fraudsters and better protect their ecosystems."
Financial services, crypto and gaming all had healthy drops in fraud rates, even though these industries tend to have higher fraud overall because the financial reward tends to be greater.
The full report is available on the Jumio site.
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