Soaring Scam and Fraud Sophistication Remains Top Challenge Threatening to Overwhelm the Global Financial Services Sector

Rhea-AI Summary

Mitek Systems, Inc. conducted a survey revealing that 76% of banks feel fraud cases are becoming more sophisticated. The biggest fraud threats include money laundering, account takeover, and forgeries, with AI-generated fraud and deepfakes being major challenges. Banks struggle with identifying customers and complying with KYC regulations. Fintech companies have better security measures compared to traditional banks. Financial institutions are urged to enhance their understanding of regulations and improve technology to combat fraud effectively.

Mitek’s new Identity Intelligence Index unmasks emerging security threats to banks, including AI-generated fraud and deepfakes

SAN DIEGO--(BUSINESS WIRE)-- Just over three-quarters (76%) of banks surveyed believe fraud cases and scams have become more¹ sophisticated, according to the new Mitek Systems, Inc. (NASDAQ: MITK) Identity Intelligence Index 2024 conducted in January 2024. Financial institutions (FIs) are on the frontlines of the evolving threat landscape and new research reveals the concerns that affect them each day as they try to keep people, their money, and their data safe.

Mitek and Censuswide commissioned the global survey of 1,500 financial services risk and innovation professionals located in the UK, US, and Spain to statistically validate what it hears from company leaders and help them plan for what is next.

Below are the significant survey findings:

Banks battle diverse fraud threats – from deepfake tech to money laundering

Banking risk and innovation leaders surveyed grapple with concerns across many different fraud types. Their biggest fraud threats are currently money laundering (25%), account takeover (23%) and forgeries (21%), while the biggest challenges today are the rise of AI-generated fraud and deepfakes (37%).

Leaders face the constant challenge of keeping up with these threats as they evolve in real-time so they can do right for their customers and fight fraud. Almost a third (32%) of risk professionals estimate that up to 30% of all transactions are fraudulent; this provides insight into how complicated the fraud landscape is today.

New customers give banks the biggest shiver

The findings reveal that new customers are often the riskiest. Banks surveyed cite that customer onboarding, or account setup, is where they see the most fraud (42%)², and the most risk (41%)². Worryingly, nearly 1 in 5 (19%) banks find it hard to identify customers at any stage of the customer journey despite global Know Your Customer (KYC) regulations aiming to put due diligence in place for organizations.

Banks ask for regulatory intelligence and tech simplicity

For banks that believe they could do more to protect customers, they place equal importance (36%) on needing a better understanding of the latest regulations, a reduction in the technology stack, and the ability to respond real-time to customer requests.

When comparing their security measures to prevent and/or catch fraudulent attacks, 41% of fintech professionals have identity verification in place, compared with 33% of mature banks. Around 1 in 3 banking professionals cite using both liveness detection (36%) and biometrics (32%) to prevent and/or catch fraudulent attacks.

“Financial institutions are under attack,” said Chris Briggs, Senior Vice President of Identity, Mitek Systems. “In today’s banking world, we know our customers are overwhelmed by an increasingly complex fraud landscape, ranging from AI-generated fraud and deepfakes globally, to record high increases in check fraud in the US. We need to unite government, businesses and technology to keep people safe online.

Note to editors

• Download the full Mitek Identity Intelligence Index 2024 report.
• Learn from industry experts and thought leaders here.
• Watch Experian's Fraud & Financial Crime Product Director, Tristan Prince, highlight the significance of managing the customer journey; Tristan reinforces that “99% of customers are good.” Watch the one-minute video here.

About this survey and Censuswide

The research was conducted by Censuswide, among a sample of 1,500 head of risk and head of innovation in the financial services sector (retail and corporate banking only) located in the UK, US, and Spain. The data was collected between 18.01.24 - 26.01.24. Throughout the release, ‘young banks’ and ‘fintechs’ refer to banks aged 0-50 years old. ‘Older’ or ‘mature’ banks refers to those aged 50+.

Censuswide is an international market research consultancy headquartered in London. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.

About Mitek

Mitek (NASDAQ: MITK) is a global leader in digital access, founded to bridge the physical and digital worlds. Mitek’s advanced identity verification technologies and global platform make digital access faster and more secure than ever, providing companies new levels of control, deployment ease and operation, while protecting the entire customer journey. Trusted by 99% of U.S. banks for mobile check deposits and 7,900 of the world’s largest organizations, Mitek helps companies reduce risk and meet regulatory requirements.

Learn more at www.miteksystems.com. Follow Mitek on LinkedIn and YouTube, and read Mitek’s latest blog posts here.

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1} Combining answer options “A great deal” and “Somewhat”.
² Combining answer options “During customer onboarding” and “During customer onboarding and after onboarding”.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240507601738/en/

TEAM LEWIS for Mitek

Jess Bradbury / Chloe Gibbs

Mitekuk@teamlewis.com

Angela Romei

Senior Director, Corporate Communications

Mitek Systems

pr@miteksystems.com

Source: Mitek Systems, Inc.

FAQ

What are the biggest fraud threats identified in the Mitek survey?

The biggest fraud threats are money laundering, account takeover, and forgeries, with AI-generated fraud and deepfakes posing significant challenges.

How many banks find it difficult to identify customers at any stage of the customer journey?

Nearly 1 in 5 banks find it hard to identify customers at any stage of the customer journey despite KYC regulations.

What security measures do fintech professionals have in place to prevent fraudulent attacks?

Fintech professionals use identity verification, liveness detection, and biometrics to prevent and catch fraudulent attacks.

Who conducted the Identity Intelligence Index 2024 report?

Mitek Systems, Inc. conducted the Identity Intelligence Index 2024 report.

What is the stock symbol of Mitek Systems, Inc.?

The stock symbol of Mitek Systems, Inc. is MITK.