Uncertain About What to Do if Identity is Stolen, Americans Expect Financial Institutions to Help
A new report for the financial services industry from intelligent identity security firm Sontiq, a TransUnion company, highlights how the increasing sophistication of cybercrime and the public’s concern is driving consumer expectations of their financial institutions — creating new challenges and opportunities for banks and credit unions.
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The 2022 Digital Safety and Security Report for Financial Services points to cybercriminals growing use of automation, AI and other advanced technologies to create more effective and financially damaging attacks. In 2021, their efforts resulted in a historic level of data compromise, with more data breaches reported than during any year on record. Consumers worry about how those incidents will affect them, with 62% of Americans reporting they are very or extremely concerned about attacks involving their personal information.
Al Pascual, senior vice president of enterprise risk solutions at Sontiq, said credit union members and bank customers are increasingly looking to financial institutions for help. More than half of fraud victims want their financial institution to help them navigate and resolve identity fraud issues.
“Consumers are increasingly anxious about cyber threats but feel unprepared to take action or deal with the fallout,” Pascual said. “Notably, they don’t want generic security advice. Financial institutions can combat increased identity risks with personalized, self-service tools that are seamlessly embedded into the digital banking experience.”
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Data in the Sontiq report indicates the personally identifiable information (PII) of nearly 300 million victims was exposed in 2021, and identity fraud losses grew an alarming 79%. Among the many risks this opens for credit unions and banks are serious synthetic identity fraud issues.
Synthetic identity theft occurs when a cybercriminal creates a new, false identity by mixing real and fictitious PII. Due to its nature, synthetic ID fraud is harder to detect than traditional identity fraud. In fact, more than 72% of financial institutions surveyed by TransUnion believe synthetic identity fraud is a much more pressing issue.
Identity fraud takes a serious toll on financial institutions and consumers alike. In addition to average financial losses of $930, victims experience severe emotional stress and often hundreds of hours of lost productivity.
Pascual said, “There is a real opportunity in the current climate for financial institutions to become the trusted resource people need. Financial institutions cannot overlook how identity security impacts their customers’ financial health. Those that address the issue with engaging education and tech-forward solutions will differentiate themselves while also fostering loyalty.”
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