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Onboarding ProcessSince the pandemic and consequent lockdowns started, we all had to change the way we lead our lives. Internet and digital technology began to have a dominant presence in our lives, with people being forced to work and study from home following the online learning method. Individuals weren’t the only ones who have seen their lives changed completely due to the pandemic and development of the internet and technology.
Even day-to-day activities have experienced a turn towards the online world due to digital transformation, some faster they originally predicted. From shopping or learning languages to gambling or banking, various industries had to also adapt to the new world and transfer their business operations online. Now, you can even have a doctor’s appointment online or consult with an interior designer.
While individuals and businesses were busy adapting to the new world, fraudsters also weren’t standing still. They constantly update their fraudulent activities to keep up with the development of technology and fraud prevention strategies. This horrible situation with the pandemic opened a whole new world of opportunities for them. Fraudsters can have an entirely new set of targets, individuals, and businesses with our growing online presence.
They only want to make a profit, and they don’t care who they will damage in the process. This is why it is imperative businesses start taking preventive actions to stop the fraudsters from exploiting their company and its customers. Proper fraud prevention needs to be implemented throughout all the business operations, from the beginning to the end of their interaction with the customer, to ensure maximum protection. For example, SEON’s digital onboarding guide explains the dangers customers and businesses can experience during the onboarding process.
Various businesses have already introduced digital onboarding processes to their operations, and the rest will follow. By using this process, companies can digitally create new user accounts to allow them access to their products and services, making the entire process faster and more secure.
Fraud is not going anywhere. In 2021, the FTC reported 2 millions cases of fraud that accumulated losses of almost 4 billion. With the constantly growing online presence, that number will just keep on growing. Implementing a proper onboarding process can help prevent your business from becoming a part of statistics. While businesses can use the onboarding process as part of their fraud prevention strategy since it can verify that customers are who they say they are, fraudsters can also exploit it. The truth is that fraudsters can find a way to use anything for financial gain and digital onboarding is no different. Following types of fraud can affect the onboarding process:
Identity theft happens when a fraudster obtains another person’s personal identity and financial information and uses them for personal gain. Once they have this data, they can use it for numerous malicious actions such as conducting fraudulent transactions, taking out a new card, or even applying for a loan.
Account takeover is a form of identity theft that happens when the fraudster gains access to the user’s account and uses it to conduct fraudulent activity. From using the account to conduct phishing or spam attacks on other unsuspecting victims, making fraudulent purchases, or even using their personal information to create accounts on other websites, there is no limit to what fraudsters can do once they get their hands on somebody’s account.
New Account Fraud is another type of identity theft that happens when fraudsters open a new account using false personal information such as stolen or synthetic identity with the sole intention of fraudulent action. This could mean creating a fake profile on a dating app or online gaming platform or it can even mean opening a new account in online financial institutions. The fraud is conducted within 90 days of creating an account, so the fraudsters can avoid getting caught.
The worst thing about the fraud is that most often won’t have only one victim, as it will affect customers and the merchants at the same time since the customer will most likely request a chargeback.
Always remember that digital onboarding is the beginning of a customer’s relationship with your business, you need to make sure both sides are protected and bad actors are kept out.