Jumio: New Account Fraud Based On ID Verification Dropped 23.2 Percent

New Jumio data indicates that new account fraud based on identity verification fell 23.2 percent globally in 2020 in contrast to 2019, according to an announcement from the identity verification and electronic know-your-customer (eKYC) provider.

Jumio’s Holiday New Account Fraud Report’s fourth iteration looks into fraudulent attempts to open a new account with a modified government-issued ID in addition to a corroborating selfie. Selfie-based fraud encompasses illegitimate attempts to harness an image or video in lieu of a legitimate selfie to corroborate a digital identity.

The company said that selfie-based fraud rates were five times above ID-based fraud. Those results indicate an increasing quantity of stolen ID documents available to buy on the dark web and emphasize the need for financial institutions to find out if an ID is legitimate.

Among the important findings of the report, Jumio found that organizations caught 80 percent greater fraud by instituting a selfie requirement as part of the identity proofing flow than if they had only mandated a government-issued ID. The discovery only shows detectable fraud attempts and doesn’t encompasses the impact the selfie mandate has on would-be fraudsters who stop the process prior to taking a selfie.

Gaming, crypto and financial services had healthy declines in fraud rates despite the fact that these verticals tend to have higher fraud in total due to higher financial rewards. And, even with broadly reported rises in fraud, the company said that Jumio clients saw fraud rates decline this year.

“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,” Jumio Chief Product Officer Philipp Pointner said in the announcement. “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.”

Separately, the PYMNTS’ December 2020 Digital Identity Tracker®, done in collaboration with Jumio explores the burgeoning area of video-based KYC.