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February 27, 2019

US credit card and DDA account application fraud losses to reach $2.7bn by 2020

By Douglas Blakey

Application fraud losses will cause $2.7bn in US credit card and demand deposit account fraud losses in 2020.

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This forecast loss represents a rise of more than 20% since 2018’s $2.2bn losses.

The forecast is revealed in a report published by global contact data quality and identity verification solution provider, Melissa.

Entitled Identity Verification: Successful Strategies to Minimise False Positives and Risk, the paper examines two key duelling priorities. That is the challenge of verifying identity without intruding on the customer experience and the operational impact of false positives.

The report canvasses expert opinion from US banks and 32 financial crime executives about pain points and planned technology spend.

Over 13 billion data records have been stolen or lost since 2013. Around 87% of bank executives say data breaches or phishing attacks are responsible for the bulk of digital channel fraud. Application fraud due to identity theft and synthetic identity fraud also play a substantial role.

The impact of these attacks will cause over $2.7bn in US credit card and DDA application fraud losses by 2020.

While fraud is increasing the pressure to reduce or even eliminate friction from the customer experience is also growing.

Improving onboarding experience is key

And 88% of fraud executives surveyed indicate that improving the customer onboarding experience is a key business case driver.

“When data quality is not part of onboarding, the match between incoming identities and the repository relies on exact matching. That is an ineffective, error-prone practice. And it can result in myriad issues around KYC, or know-your-customer, and other regulations,” says Barley Laing, UK MD, Melissa.

Julie Conroy, Research Director of report authors Aite Group, adds: The importance of ongoing investment in new technology cannot be understated. Data is the new currency and creating intelligence from data at scale can give firms a competitive edge.”

The report is available for download via this link.

Free Report
img

Prepare for changes in the Payments market

 The Payments market has seen drastic changes in the past few years, with this only expected to continue. What does your company need to do to prepare for what’s to come? GlobalData’s Payment Trends for 2022 report explores the key trends in technology, consumer habits, and regulations shaping the market. We also identify the leading companies in this changing market, giving you a competitive market outlook. This report covers the impact of:
  • ESG
  • E-commerce
  • Mobile payments
  • Alternative payment rails (Real-Time Payments, Blockchain, BNPL)
  • Fraud & Cybersecurity
  • Regulations
Download the report now to learn essential strategies to maximize your growth in the face of rapid change.
by GlobalData
Enter your details here to receive your free Report.

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