Leveraging Open Banking to Combat Synthetic Identity Fraud
Open banking, which refers to the sharing of financial data electronically, securely, and with the consent of the customer, can be leveraged to combat fraud, including synthetic identity fraud.
Synthetic identity fraud occurs when criminals combine real and fake information to create a new, fictitious identity.
How Basiq's Open Banking Capabilities Can Enhance Fraud Prevention for Chippit
1. Real-time Data Access: Through open banking, Chippit can access up-to-the-minute data when opening new accounts. This timely access enhances identity verification, reducing reliance on outdated or static datasets.
2. Consent Management: Open banking operates on the principle of explicit customer consent. This means that any access to a customer's data requires explicit permission, making unauthorized access and data misuse more difficult.
3. Improved Due Diligence: Open banking frameworks can assist Chippit and similar financial entities in conducting more thorough due diligence before approving new accounts or transactions. This rigorous check can act as a barrier to synthetic identities.
4. Enhanced Verification Processes: With open banking, Chippit can leverage aggregated data from various sources to strengthen identity verification processes, making it tougher for synthetic identities to pass through.
5. Advanced Analytics and Machine Learning: Open banking can fuel advanced analytics and machine learning models by providing more comprehensive data sets. These models can be trained to identify patterns consistent with synthetic identity fraud, which might be missed by traditional methods.
6. Transaction Monitoring: With the detailed transaction data available through open banking, Chippit can leverage sophisticated transaction monitoring systems from financial institutions. These systems can detect unusual patterns or behaviors indicative of synthetic identity fraud.
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