GRC Viewpoint

Socure, a Regtech company, unveils an innovative solution targeting synthetic fraud issues

Socure, a company specializing in using AI for digital identity verification, has rolled out Sigma Synthetic Fraud v4. This latest tool taps into machine learning and a range of third-party data sources to pinpoint tricky synthetic identity fraud patterns. Research from the Deloitte Center for Financial Services points out that synthetic identity fraud could lead to around $23 billion in losses by 2030. It’s a sneaky financial crime where bits of real personal info get mixed with fake details, creating a phoney identity for illegal purposes.

READ MORE: Navigating Regulatory Challenges in the Financial Technology Realm: The Role of RegTech

The catch with synthetic identity fraud? Perpetrators sneak in, establish a good credit score, open various accounts, and seem like model customers until they decide to vanish after maxing out credit lines. Socure’s Sigma Synthetic Fraud v4 steps in early, spotting this fraud during onboarding. According to their research, synthetic identities account for 1-3% of open accounts in U.S. financial institutions.

This latest version sources “Proof of Life” data from diverse places like property records, driver’s licenses, and educational info. This new addition helps validate younger and immigrant demographics, usually having less digital presence. Without these data sources, these specific groups might get wrongly flagged as synthetic fraudsters, locking them out of financial services.

READ MORE: Regulation is sabotaging security: here’s what we need to change

Yigit Yildirim, SVP of Fraud and Risk Products at Socure emphasized that traditional rule-based systems or third-party fraud solutions often miss detecting synthetic fraud. Synthetic identity fraud happens when crooks blend real and fake info to create new fake identities for loans, credit, or moving illegal funds.

As these fraudsters use more sophisticated AI, it’s getting harder to tell the good guys from the bad. It’s now the fastest-growing financial crime in the U.S. Per incident, synthetic fraud can cost ten times more than third-party identity fraud. Each synthetic fraud opportunity carries higher profits, especially in benefit frauds or scams.

Sigma Synthetic Fraud v4 updates include innovative Email Risk Enhancements and leveraging Consortium Data for better detection across industries and government agencies. This collaboration allows Socure to stay ahead in enhancing accuracy against these evolving fraudulent tactics.

Related Articles

Latest Articles