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The Signicat Blog

Stand up to the scamdemic: how Signicat helped reduce fraud costs and fraud rate by 75%

Fraud is indeed reaching national security threat levels in all countries, so how can companies fight back?

In the ever-evolving landscape of finance, companies face a dual threat when it comes to identity fraud, presenting challenges that can potentially jeopardize their financial stability and regulatory standing. One facet of this threat emanates from adept fraudsters who manipulate identity documents to engage in activities like opening fraudulent bank accounts or requesting a loan, posing a significant risk to financial institutions. Simultaneously, another breed of fraudsters targets users by stealing their login credentials, exposing them to unauthorized access and potential financial loss.

For instance, fraudsters stole £580 million in the UK in the first six months of 2023 alone, according to UK Finance. Of this, £57.2 million was stolen via fake investment scams, £43.5 million by criminals impersonating police or bank staff and £18.5 million via romance scams.

The level of fraud in Europe has reached a point where it must be considered a national security threat in all countries. This is partly a hangover from Covid-19.

From pandemic to scamdemic

Driven by national lockdowns during the coronavirus pandemic, fraud offenses increased significantly over the two-year period ending March 2022. Cyber-related fraud techniques were sophisticated in the past years and allowed criminals to put a Covid twist on existing scams. With people locked down and lonely, romance fraud boomed. Scammers used the virus as a reason they couldn’t meet in person. Or they exploited people’s financial vulnerability with offers for debt consolidation, payday loans, investment or work-from-home scams.

Fraud against individuals is only the tip of the iceberg. The private sector, especially companies in regulated sectors such as the financial sector, is confronted every day with fraudsters trying to cheat their security processes.

Signicat’s value is in offering an easy digital journey for the customer, meeting AML and KYC requirements, and still at the same time reducing fraudsters”.

Director of business development and digital capabilities, financial services

As far as fraud is concerned, it is a case of "if it ain't broke, don't fix it". Criminals continue to use proven post-pandemic attack typologies, largely because they still work:

  • ID fraud – criminals impersonate victims by using their personal details to buy goods or apply for accounts, loans, or cards in their name.
  • Synthetic ID fraud – criminals blend real and fictitious information to create a synthetic identity to apply for loans, credit cards, and mobile phone contracts. These fake IDs can also be added to accounts or credit cards as a secondary user to build a credit profile.
  • Account takeover fraud – criminals gain access to a victim’s account, without their knowledge or permission, to make fraudulent purchases, transfers, or applications, or lock the rightful owner out of the account.

But, of course, when we talk about fraud, we also have to take into account the AML regulations that exist both at local and European level and which attempt to frame companies in highly regulated sectors and prevent them from getting into critical fraud situations.

Navigating KYC and AML regulations in one country can already be difficult in some cases but... what about companies that want to scale cross-borders? They face the challenges of expand their commercial activities in countries where they don't necessarily have a team but also to face the risk of non-compliance and fraud.

Scammers’ modus operandi

Popular attack vectors for ID fraud remain social engineering or phishing, where criminals send e-mails, texts or messages via social media to look like they come from trusted sources. These trick the recipient into revealing personal data or transferring money.

Data security breaches, card skimming and mail intercepting are still favourite ways for criminals to access personal or sensitive data for ID fraud, extortion or other crime. But AI-generated fraud and deepfakes used to clone likenesses and voices to dupe victims are ones to watch.

The consequences of identity fraud are severe, ranging from substantial financial losses to fines imposed by local regulators. Businesses are at the crossroads of balancing compliance with the financial viability of implementing robust security measures. Anti-money laundering laws, designed to protect against illicit financial activities, can test the resources of companies trying to adapt to a variety of regulatory environments.

Signicat powers fraud fightback

In light of these challenges, businesses are exploring comprehensive solutions to streamline their compliance efforts. Signicat emerges as a game-changer, offering a consolidated, one-stop-shop approach to digital identity solutions. Through a single point of entry, companies can access a range of identity proofing and authentication services tailored to the specific requirements of different countries. This not only simplifies the compliance process but also provides the assurance that businesses need to operate confidently in a globalized financial landscape. In an era where the stakes are high and the risks are multifaceted, Signicat stands as a reliable ally, empowering companies to navigate the complexities of identity fraud with confidence and compliance.

"In our previous environment, there was a gap because the entire process could not be replicated manually across markets, meaning that we had a higher number of fraudsters coming in through the acquisition journey”.

Director of business development and digital capabilities, financial services

To examine the potential return on investment (ROI) businesses may realise by deploying its platform, Signicat commissioned Forrester Consulting to conduct a 2023 Total Economic Impact ä (TEI) study.

Forrester interviewed five representatives with experience in using Signicat. And aggregated the interviewees’ experiences, combining the results into a single composite organisation. Some of the needs of the different interviews included a solution that could:

  • Reduce fraud rate.
  • Help them be compliant across different markets.
  • Reduce the cost of managing different identity solutions across different markets.

All while, of course, ensuring higher conversion rates and an improved customer experience.

The study revealed that Signicat has a pivotal role when it comes to fraud prevention but also to comply with local and regional AML regulations. Some of the key findings of the study include:

  • A 75% reduced fraud costs resulting from a fraud rate reduction: Through different identity proofing methods like digital identities or electronic identity verification it uses and its fraud monitoring capabilities, Signicat showed the capability to reducing the number of fraudulent customers during the onboarding and process. It also prevents fraudsters who are impersonating customers from accessing existing customers’ accounts or portals.
  • Improved ability to meet anti-money laundering (AML) regulations across countries: having the assurance of leveraging an industry-leading expert in local and global AML regulations as well as in Digital Identity and Trust. Signicat offers the ease of entering new markets in a matter of days, without the complexities of local compliance and regulations, as its solutions are fully compliant with all KYC and AML regulations required for highly regulated sectors such as companies in the financial sector. This is all made possible by having a single provider for all processes in every country - the one-stop-shop solution offered by Signicat.
  • 17 days to deploy Signicat into a new market. A single access point to 30+ local eIDs, plus ID documents and biometric verification for markets without eID, makes rapid market expansion easy. It also takes the complexity out of compliance, saving time and effort navigating regulatory requirements, thereby accelerating expansion and time to value.

One of Signicat’s core strengths is its ability to deliver and react, and to support our business by providing meaningful insights and expertise in terms of AML regulations and changes”.

Managing director of payments, tech/delivery

Signicat helps businesses prevent fraud, expand cross-border and comply with regulatory requirements. Its digital identity platform incorporates a suite of identity proofing, authentication, fraud detection, and signing systems, all accessible through a single integration point.