Security News > 2023 > April > The staggering cost of identity fraud for financial services

The impact of identity fraud varies for organizations in the financial services industry, based on whether they belong to the banking or FinTech sector, according to Regula.

When asked to evaluate the cost of the identity fraud they had experienced, the banking sector was found to be the most severely impacted, with a median financial burden of over $310,000.

The key costs affecting organizations across all sectors due to identity fraud are related to business disruption and legal expenses.

Specifically, for the banking sector, the second-largest cost resulting from identity fraud is penalties and fines, while for FinTech organizations, it is the loss of current and potential clients.

"The rapid digitization of the financial services sector has led to an increase in identity fraud, as fraudsters take advantage of the lack of physical presence required for identification. Although physical ID verification is the most reliable, organizations are increasingly turning away from it due to scalability, cost and user experience issues. To effectively combat identity fraud in the digital age, organizations must implement secure and reliable identity verification processes, leveraging advanced ID verification technologies and expertise in document security features," says Ihar Kliashchou, CTO at Regula.

It's no surprise that in this context, 93% of organizations recognize the significance of online identity verification in detecting and preventing fraud.

News URL

https://www.helpnetsecurity.com/2023/04/06/identity-fraud-financial-services-industry/